LIBRARY 

UNIVERSITY  OF 
CAUFORNIA 

SAN  DIEGO 


^JV 

/€>  J 

SOCIAL  SERVICE 


SOCIAL 
SERVICE 


BY 
LOUIS   F.   POST 

AUTHOR  OF  "ETHICS  OF  DEMOCRACY," 
"ETHICAL  PRINCIPLES  OF  MAR- 
RIAGE AND  DIVORCE,"  ETC. 


New   York 

A.    WESSELS 

1909 


COPYRIGHT,  1909 
Bv  LOUIS  F.   POST 


Ste 
TOM  LOFT  IN  JOHNSON 

who  also  sat  at  the  feet  of  Henry  George 
and  learned  of  him. 


CONTENTS 

PAGE 

DEDICATION viii 

CHAPTER    I 

INTRODUCTION 1 

The  intricate  co-operative  process  of  serving  a. 
dinner;  of  street  car  service;  of  merchandiz- 
ing; of  house  building;  of  professional  service. 
Mutuality  of  service  and  its  indispensability. 
Normal  interchanges  of  service.  Civilized  life 
a  complex  social  organism  vitalized  by  trade. 
Simplicity  of  the  science  of  the  social  organ- 
ism. Money  as  a  certificate  of  title  to  social 
service. 

CHAPTER   II 

THE  USE  OF  MONEY  IN  SOCIAL  SERVICE  ...  16 
The  money  function  a  primary  consideration. 
Money  subordinate  to  the  services  it  exchanges. 
Money  as  currency.  Value.  Statistics  of  Value. 
The  language  of  money.  Clearing  houses. 
Comparison  of  details,  regarding  money,  with 
essential  principles.  Enumeration  of  prin- 
ciples. 

CHAPTER    III 

THE  ABUSE  or  MONET  IN  SOCIAL  SEBVICE  ...  46 
Pathology  and  "  healthology."  Love  of  money 
equivalent  to  love  of  dominion,  which  is  love 
of  slavery.  Hunger  and  Cold.  Wishing  for 
money.  Gold  and  silver  coinage.  Intrinsic 
value.  Greenbackism.  Money  a  form  of  credit. 
Pathological  money  standards.  Interest.  Loan 
sharks.  The  essential  principle  of  a  loan.  Un- 
fair distribution  of  social  service  not  neces- 
sarily due  to  bad  money  systems. 
iii 


CHAPTER   IV 

INDIVIDUAL  SELF-SEBVICE  THE  PRIMARY  IMPULSE 

OF  SOCIAL  SEBVICE 70 

Why  we  swap  social  services.  Charity.  Hospi- 
tality. Easy  money.  Progress  and  Poverty. 
The  key  to  the  science  of  social  service.  Politi- 
cal economy.  The  line  of  least  resistance. 
Marvelous  invention.  The  baffling  problem  of 
our  time.  Co-operation  in  the  business  world. 
The  round-up  of  social  service.  The  social 
service  market. 


CHAPTER   V 

DEMAND  AND  SUPPLT 100 

Buyers  virtually  make  what  they  buy.  "  Giving 
work."  Demand  for  consumption  determines 
the  direction  in  which  labor  will  be  expended 
in  producing  supply.  Service  and  commodities. 
Artificial  commodities — wealth.  Producers  of 
wealth.  Meaning  of  production  and  consump- 
tion. Commodities  in  the  market  like  water 
in  a  reservoir.  Mankind  live  from  hand  to 
mouth.  Wealth  cannot  be  saved.  Overproduc- 
tion. Equilibrium  of  supply  and  demand. 
Effective  demand.  Current  demand  satisfied 
only  from  current  production.  Formulation 
of  the  law  of  demand  and  supply. 


CHAPTER   VI 

COMPETITION 128 

The  " tooth-and-claw "  argument.  "Jug-han- 
dled "  competition.  Competition  and  co-opera- 
tion convertible  terms.  Abolishing  competition. 
Pathology  of  competition.  Competition  the 
natural  regulator  of  the  social  service  market. 
Determined  by  the  irksomeness  of  work. 
Values.  Land  values.  Natural  function  of 
competition.  Competition  and  monopoly  anti- 
thetical. The  doctrine  of  "all  the  traffic 
will  bear." 


CHAPTER   VII 

THE  MECHANISM  OF  SOCIAL  SERVICE     ....     149 
Business.      Usefulness      and      serviceableness. 
General  principles.    Advances  of  wages.     Em- 
ployers and  employes  as  partners.     Business 
pathology. 

CHAPTER   VIII 
TRADING 162 

Going  "  over  to  town  to  trade."  The  vast 
field  of  trade.  The  social  service  of  the  world. 
How  farmers  trade.  Stores.  Specialization 
and  generalization  in  storekeeping.  Mutual  ac- 
cidents. "  Surplus  "  service.  Workers  and 
parasites.  Definition  of  trade.  Wholesale  and 
retail  stores.  Reservoir  illustration.  History 
of  storekeeping.  Cut-throat  competition.  Com- 
petitive impulses.  Free  competition.  Profits. 
Newspaper  illustration.  "  All  the  traffic  will 
bear."  Exploitation  of  labor.  Fishing  at 
Green's  pond.  Monopoly.  Co-operative  in- 
dustry. 

CHAPTER    IX 

THE  CIRCLES  OF  TRADE 184 

Retail  stores.  Food,  clothing,  shelter,  luxu- 
ries, and  personal  services.  Wholesale  stores. 
Factories.  Original  materials.  Transporta- 
tion. Accounts.  Action  and  reaction  of  pro- 
duction and  consumption.  Value.  "  Corners." 
"  Higgling."  Market  places,  ancient  and 
modern.  Monopoly  versus  competition.  Busi- 
ness. 

CHAPTER   X 

CREDITS  AND  ACCOUNTING 197 

The  mechanism  of  payments.  Illustration  of 
the  interlinked  phenomena  of  barter.  Value 
measurements.  Currency.  Credits.  Book- 
keeping. Banks.  Checks.  Clearing  Houses. 
Brokerage  in  credits.  Insurance  of  credits. 
Illustration  of  the  interlaced  phenomena  of 
credit.  Bills  of  exchange.  International  trade. 
Balances  of  trade.  Business  is  barter. 


CHAPTER     XI 

DERANGEMENTS   OF    THE    MECHANISM   OF   SOCIAL 
SERVICE 223 

The  pathology  of  social  service.  Painful 
social  contrasts.  Idlers  and  workers.  Pur- 
chasing power.  Producers  and  consumers. 
Diversion  of  service.  Mutual  employment. 
Checking  of  mutual  employment.  Business  de- 
pressions. Tax  obstructions.  Free  trade.  The 
instruments  of  production — artificial  and 
natural.  Opportunities  for  production.  The 
fundamental  requisite  of  social  service. 

CHAPTER   XII 

ANALYSIS  OF  THE  INSTRUMENTS  OF  SOCIAL  SERVICE  233 
Production  and  distribution.  Wages.  Interest. 
Rent.  Insurance.  Wages  of  superintendence. 
Ability.  The  entrepreneur.  Capital.  Land. 
Labor.  Natural  and  artificial  instruments  of 
production.  Commodities.  Diagrams  of  pro- 
duction. Human  activity  utilizing  natural 
instruments,  produces  consumable  objects  in- 
clusive of  artificial  instruments. 

CHAPTER    XIII 

ARTIFICIAL  INSTRUMENTS  OF  SOCIAL  SERVICE     .      .     250 
Indispensability     of     artificial      instruments. 
Produced    by    current    labor.      Monopoly    of 
artificial      instruments.      Industrial     classes. 
Governmental  power. 

CHAPTER    XIV 
NATURAL   INSTRUMENTS   OF    SOCIAL   SERVICE   AND 

THEIB   CAPITALIZATION 262 

Monopoly  of  natural  instruments.  Meaning 
and  effect  of  capitalization.  Value.  From 
Feudalism  to  Capitalism. 

CHAPTER    XV 

FEUDALISM 271 

Capitalistic  conditions  under  Feudalism.     In- 
dustrial  history.     Development  of   Feudalism 
and  its  supersedure  by  Capitalism. 
vi 


CHAPTER    XVI 

CAPITALISM 881 

Its  beginning.  Its  intensification.  Its  nature. 
Its  triumph  over  Feudalism.  Its  confusions. 

CHAPTER   XVII 

KAKL  MAEX  AND  HENBY  GEORGE 295 

The  influence  of  capitalistic  confusions. 

CHAPTER    XVIII 

FBOM  PBIMITIVE  TO  CAPITALISTIC  PRODUCTION     .     306 
The  most  primitive  forms.    Persistence  of  the 
essential    principles    into    the    most    complex 
forms.     Bellamy's  water  tank  illustration. 

CHAPTER   XIX 

THE  SOCIAL  SERVICE  LAW  OF  EQUAL  FREEDOM     .     317 
Natural  laws.    R§sum6  of  preceding  chapters. 
Natural    and   artificial    capital.     Meaning   of 
the     law    of    equal     freedom.     Unperverted 
capitalism. 

CHAPTER   XX 

APPLICATION  OF  THE  LAW  OF  EQUAL  FREEDOM:  .  335 
The  co-operative  commonwealth  under  unper- 
verted  capitalism.  Evolutionary  processes 
versus  conventional  contrivances.  The  prin- 
ciple of  free  contract.  Socialism,  artificial 
and  natural. 

CHAPTER    XXI 

METHOD 347 

Deference  to  custom.  Taxation.  The  "  single 
tax."  Socialization  of  natural  capital  and 
individualization  of  artificial  capital.  Differ- 
ential value  of  land.  Natural  socialism  the 
beneficent  social  climax. 


vii 


SOCIAL  SERVICE 


CHAPTER  I. 
Introduction. 

Leaning  back  in  our  chairs  at  a  cozy  restaurant, 
you  and  I,  smoking  it  may  be  while  we  talk  across 
the  table,  our  conversation  possibly  turns  to  the 
dinner  we  have  just  had — not  sensuously  as  with 
gluttons,  but  reflectively  as  men  interested  in  the 
whys  and  the  wherefores  even  of  the  commonplace. 

A  question  has  influenced  the  current  of  our 
thoughts.  How  did  we  get  this  dinner?  By  what 
magic  was  that  variety  of  appetizing  food  laid  be- 
fore us  at  our  pleasure  and  upon  our  request?  Is 
there  in  truth  an  Aladdin's  lamp?  Are  there 
omnipotent  genii  to  work  wonders  at  an  Aladdin's 
touch?  Let  us  recall  the  circumstances. 

When  we  entered  the  restaurant,  a  neatly 
dressed  well  mannered  gentleman  conducted  us  to 
this  table.  He  was  none  of  your  genii  of  a  thou- 
sand Arabian  nights,  but  a  man  like  ourselves. 
He  serves  his  fellow  men,  and  they  call  him  not 
inaptly  the  "head  waiter."  Having  seen  us  com- 
fortably seated,  the  head  waiter  turned  his  atten- 
tion elsewhere,  leaving  another  neatly  dressed  and 
well  mannered  gentleman — none  of  your  mythical 
genii  either,  but  a  fellow  man  whom  they  call  a 
"waiter" — to  take  our  orders  for  food.  The  waiter 
withdrew  upon  getting  our  orders,  and  presently 
returned  with  a  supply  of  crockery,  silverware, 


2  SOCIAL     SERVICE 

napkins  and  other  table  furnishings.  In  due  time 
he  brought  us  our  food,  course  by  course,  then  our 
coffee,  and  finally  the  cigars  we  are  smoking  and 
the  little  jar  of  matches  with  which  we  light 
them. 

So  much  we  saw.  But  there  was  more  that  we 
did  not  notice,  and  vastly  more  that  we  could  not 
have  seen  had  we  tried — all  a  part  of  the  neces- 
sary process  of  serving  our  dinner.  Neither  the 
waiter  nor  the  head  waiter  was  a  magician  who 
could  say  "Let  there  be  bread/'  and  there  is 
bread;  or  "Let  there  be"  this  or  that,  and  it 
comes.  Workers  like  themselves  must  have  re- 
sponded to  their  directions,  whether  we  saw  the 
other  workers  or  not.  Though  we  did  not  see  a 
cook,  there  was  a  cook  in  the  hot  kitchen  who 
served  us  as  truly  as  the  waiter  did,  and  without 
whose  aid  the  waiter  could  not  have  served  us  at 
all.  We  did  not  see  the  furniture  makers,  nor  the 
silversmiths,  nor  the  spinners  and  the  weavers, 
nor  the  makers  of  the  lighting  appliances,  nor  the 
crockery  makers,  of  whom  the  implements  and 
furnishings  for  our  comfort  in  eating  must  have 
been  procured.  Neither  did  we  see  the  cigar  mak- 
ers nor  the  tobacco  raisers  whose  product  we  are 
now  turning  into  fragrant  smoke,  nor  the  makers 
of  the  matches  we  have  burned,  nor  the  decorators 
who  made  these  walls  sightly,  nor  the  builders 
who  erected  the  house  in  which  we  sit,  nor  the 
printers  and  paper  makers  who  supplied  the  bill 
of  fare.  Yet  all  these  craftsmen  have  in  greater 
or  less  degree  made  it  possible  for  the  waiter  to 
serve  us  as  he  has  done.  Each  has  been  an  opera- 
tor in  the  process.  Altogether,  they  have  co-oper- 
ated. 

Even  when  all  these  co-operative  craftsmen  are 
considered,  the  roll  of  co-operators  to  whom  we  are 
indebted  for  this  dinner  is  far  from  complete. 
Back  of  the  cook  are  tradesmen  who  supply  the 


INTRODUCTION  3 

kitchen  with  cooking  implements  and  food  mate- 
rials, and  carriers  who  deliver  them.  Back  of 
these  are  wholesalers  who  have  supplied  the 
tradesmen — all  equipped  with  their  respective 
clerks  and  bookkeepers  and  other  helpers  or  co- 
operators.  Back  of  these  again  are  the  builders  of 
their  stores,  the  makers  of  their  delivery  wagons 
that  rattle  through  the  streets,  the  builders  of 
railroads  and  cars,  and  the  railroad  men  who  op- 
erate them.  Still  farther  back  in  the  order  of 
this  simple  dinner  service  are  millers,  butchers, 
ranchers,  farmers,  cotton  raisers  and  cotton  pick- 
ers, sailors,  shipwrights,  miners,  lumbermen,  cof- 
fee producers,  oyster  dredgers,  fishermen,  plow- 
men, hunters,  dairymen — an  infinite  variety  of  pro- 
ducers and  traders,  with  commercial  ramifications 
extending  all  over  the  world.  Get  the  picture 
into  your  mind.  Don't  you  see  that  we  have  bro- 
ken into  a  labyrinth  of  social  service  so  confusing 
ac  to  defy  complete  description  in  detail  ? 

That  match,  now,  with  which  you  have  relighted 
your  cigar — look  at  it.  It  is  only  a  little  sliver 
of  wood  charred  at  one  end  where  a  moment  ago, 
before  you  took  it  from  its  fellows  in  the  jar,  there 
was  a  crust  of  sulphur  and  a  hardened  dab  of 
phosphorus — the  simplest  item  of  all  the  objects 
that  have  contributed  to  our  enjoyment  at  this 
table  to-night.  Yet  he  would  be  a  learned  special- 
ist of  many  specialties  who  could  write  the  biog- 
raphy of  that  match.  Try  it  for  yourself.  The 
waiter  fetched  it  for  you.  It  had  been  bought  in 
a  package  of  the  grocer  up  the  street,  and  he  had 
sent  the  package  here  by  one  of  the  boys  he  hires. 
Before  that  he  himself  had  bought  it  in  a  larger 
package  of  a  wholesale  merchant,  who  in  turn  had 
bought  it  of  the  manufacturer,  who  had  bought 
the  wood  of  lumbermen  and  the  sulphur  and  the 
phosphorus  of  an  importer.  The  story  thus  far  is 
not  difficult  in  its  general  outlines.  Neither  would 


4  SOCIAL    SERVICE 

it  be  very  difficult  to  trace  the  lumber  back  through 
a  saw  mill  to  the  chopper  in  the  forest,  the  sulphur 
to  some  gypsum  bed  perhaps,  and  the  phosphorus 
back  through  the  fumes  of  deadly  factories  to 
collections  of  old  bones.  But  when  your  imagina- 
tion turns  to  the  collateral  co-operators,  you  be- 
gin to  realize  the  meaning  of  infinite  com- 
plexity. For  you  must  pick  up  the  threads  of 
the  story  of  the  wood  chopper's  axe,  and  follow 
them  back  from  the  axe  in  his  hand  to  the  forest 
where  the  helve  was  cut  and  the  mine  whence  the 
ore  was  taken,  through  all  the  intervening  chan- 
nels of  manufacture  and  sale  not  only  of  the  axe 
itself  but  of  all  the  implements  used  in  its  mak- 
ing and  final  delivery.  Then  you  must  repeat  this 
confusing  process  with  the  saw  mill  and  its  im- 
plements and  the  implements  with  which  they 
were  made;  and  after  that,  if  your  interest  does 
not  flag,  with  all  the  delicate  machinery  of  the 
match  factory  and  the  delicate  machinery  with 
which  that  delicate  machinery  itself  was  made. 
By  this  time  you  will  have  a  liberal  education  in 
the  industrial  arts,  sufficient  perhaps  to  give  you 
a  hint  of  other  and  even  more  confusing  labyrinths 
to  explore  before  you  can  definitely  tell  how  that 
little  match  got  away  from  its  native  condition 
and  into  your  hands  just  as  you  needed  a  light 
for  your  cigar. 

If  now  you  begin  to  realize  the  bewildering 
complexity  of  the  social  process  of  merely  provid- 
ing the  materials  for  the  dinner  we  have  had,  turn 
your  attention  to  the  service  of  marshaling  and 
adapting  those  materials  so  as  to  make  a  dinner 
of  them.  Think  of  the  function,  for  instance,  ot 
the  proprietor  of  this  restaurant,  our  good  friend 
Joseph  over  there.  Without  his  service  all  the 
other  service  would  have  been  useless  to  ns.  It 
was  his  forethought  and  skill  that  bwaight  into 
such  correlation  as  exactly  to  meet  our  needs  for 


INTRODUCTION  5 

a  dinner  at  a  particular  place  and  hour,  the  ser- 
vices of  the  head  waiter,  of  the  waiter  and  the 
cook,  of  the  artisans  who  made  the  room  comfort- 
able and  sightly,  and  of  all  the  army  of  social  ser- 
vitors whose  co-operative  usefulness  to  us  we  have 
been  trying  to  realize  and  appreciate.  But  if  we 
really  could  comprehend,  as  neither  you  nor  I  nor 
any  one  else  can  possibly  do,  the  details  of  the 
labyrinth  of  social  service  involved  in  supplying  a 
restaurant  dinner,  as  simple  even  as  ours  has  been, 
we  should  still  be  only  on  the  edge  of  understand- 
ing the  details  of  social  service. 

Let  us  then,  as  we  leave  the  restaurant,  pursue 
our  thought,  but  with  reference  to  other  needs  and 
comforts  than  those  of  the  table. 

We  are  now  on  a  street  car.  Here  is  a  motor- 
man  who  takes  us  to  your  home.  Here  are  cars 
that  other  men  have  built  to  enable  him  to  do  it. 
These  cars,  like  the  match  at  the  restaurant,  have 
their  complex  history,  beginning  in  mine  and  for- 
est— alike  for  materials  for  the  cars  and  for  the 
tools,  the  machinery  and  the  buildings  necessary 
for- their  construction,  and  the  mechanism  neces- 
sary for  propulsion — and  ending  as  we  find 
them  now,  in  carriages  rolling  along  upon  railed 
pavements.  Then  there  are  the  rails,  the  trolley 
wire,  the  power  houses,  with  a  regiment  of  men  to 
maintain  and  operate  the  system  so  that  a  car 
may  be  ready  for  us  when  we  are  ready  to  go 
home.  Again  you  are  in  a  labyrinth  of  social 
service. 

Behold  the  same  bewildering  complexity  as  we 
stop  to  leave  an  order  at  the  corner  grocery  near 
your  house.  A  clerk  takes  your  order,  a  deliverer 
will  bring  the  goods  to  your  door.  But  back  of 
the  clerk  is  the  grocer  himself,  who  has  stocked 
the  store,  who  thoughtfully  keeps  it  stocked,  and 
who  in  other  ways  superintends  its  affairs,  so  that 
you  and  your  neighbors  may  have  groceries  of 


6  SOCIAL    SERVICE 

your  choice  and  at  your  convenience.  But  back 
of  grocer  and  grocer's  assistants  are  wholesalers, 
manufacturers,  importers,  transporters  by  land 
and  sea,  exporters  at  scores  of  foreign  seaports, 
original  producers  in  a  thousand  distant  places — 
all  told,  an  army  and  a  navy  of  workmen,  clerks, 
sailors,  and  helpers  of  every  kind. 

So  it  is  with  your  clothing.  Those  shoes  came 
from  a  department  store,  as  did  your  hat,  your 
underwear,  your  furnishings,  and,  since  you  are 
not  fastidious  about  wearing  tailor-made  cloth- 
ing, as  did  also  your  coat,  your  trousers  and  your 
waistcoat.  Several  clerks  have  helped  you  in 
your  purchases,  and  department  store  deliverers 
have  brought  the  goods  to  your  house.  Again 
you  are  in  a  whirl  of  social  service.  For  back 
of  the  clerks  and  deliverers  are  managers  and  sub- 
managers  ;  and  back  of  them  are  transporters  and 
manufacturers  and  mechanical  workmen,  while 
back  of  these  are  farmers  and  planters  and  herd- 
ers and  butchers  and  tanners,  and  so  on  and  on  in 
an  infinite  complexity  of  wholesale  stores  and 
their  owners,  of  managers  and  clerks,  of  factories, 
mines,  forests,  farms,  ranches  and  railroads  in  our 
own  country,  of  factories,  mines,  forests,  sheep- 
folds,  and  railroads  in  other  countries,  of  ships, 
drays,  warehouses  and  machines,  with  their  mil- 
lions upon  millions  of  men,  and  even  of  women 
and  children,  all  co-operatively  toiling  to  render 
service,  such  service  as  you  receive  from  the  cloth- 
ing you  wear. 

Are  we  now  at  your  house?  Did  you  ever  ask 
yourself  where  this  house  came  from?  Nature 
provided  the  materials,  it  is  true,  but  not  in  their 
present  convenient  place  and  comfortable  form. 
Architects  and  builders  with  their  various  as- 
sistants, reinforced  by  an  army  of  lumbermen, 
brickmakers,  miners,  transporters  and  traders  in 
confusing  variety,  made  you  this  house.  Not  your 


INTRODUCTION  7 

own  house,  do  you  say?  You  are  only  a  tenant? 
Very  well;  then  an  additional  co-operator,  the 
house  owner,  has  served  you  by  marshaling  the 
services  of  the  builders  to  have  the  house  ready 
for  your  use  at  a  time  and  in  a  place  to  suit  your 
wants 

As  with  this  house  that  you  are  about  to  enter 
and  which  you  call  your  home,  so  with  all  the 
houses  of  your  neighbors.  So  with  everything 
any  of  us  may  use.  Workers,  workers,  workers; 
here,  there,  everywhere!  Growing,  constructing, 
carrying — doing.  It  is  quite  impossible  to  de- 
scribe, almost  impossible  to  imagine  in  any  de- 
tail, the  incessant  work,  the  continuous  service, 
the  intricate  co-operation  that  make  it  possible  for 
you  and  me  to  get  as  we  want  them  a  house  to 
live  in,  a  ride  on  a  street  car,  a  choice  of  groceries, 
a  dinner  at  a  restaurant,  a  cigar  to  smoke,  even  a 
match  to  light  it  with.  And  minute  as  we  have 
tried  to  be,  we  have  nevertheless  overlooked  the 
bankers,  who  play  an  important  part  in  all  this 
work,  and  we  have  made  no  account  of  lawyers, 
doctors,  teachers,  actors,  authors,  clergymen, 
journalists  and  hosts  of  other  social  servitors, 
who  in  some  way  or  other,  directly  or  indirectly, 
minister  to  our  desires. 

How  is  it  possible  to  fix  your  attention  at  all, 
even  superficially,  upon  these  facts  of  common 
observation,  without  realizing,  and  in  a  startling 
way  if  you  have  never  thought  of  the  matter  be- 
fore, that  some  people  are  incessantly  serving 
other  people,  and  that  everybody  is  somehow  and 
somewhere  being  all  the  time  served  by  somebody 
else?  To  the  extent  of  our  demands,  at  restau- 
rants and  hotels,  upon  street  cars,  at  grocery 
stores,  at  department  stores,  in  housebuilding  and 
housekeeping,  in  clothes-making  and  clothes-sell- 
ing, in  sickness  at  the  hospital  or  at  home,  and  by 
all  manner  of  persons  through  all  manner  of 


8  SOCIAL     SERVICE 

trades  and  professions,  from  the  first  gasp  of 
breath  at  birth  to  the  placing  of  a  tombstone  at 
the  last,  we  are  in  the  midst  of  a  whirl  of  social 
service ;  and,  to  thai  extent,  every  person  the  wide 
world  over  who  helps  immediately  or  remotely,  in 
great  degree  or  in  little  degree,  to  satisfy  our  de- 
mands at  the  time  when  and  at  the  place  where 
we  make  them,  is  serving  us.  Though  the  details 
of  this  service  be  so  numerous  and  so  bewildering 
in  their  complexity  as  to  defy  statistical  notation, 
yet  the  great  general  fact  is  clear  enough.  The 
coffee  picker  in  Porto  Eico,  the  tobacco  stripper 
in  Cuba,  the  rancher  in  Texas,  the  butcher  in 
Packingtown,  the  farmer  on  Western  prairie  or  in 
Eastern  valley,  the  baker  around  the  corner,  the 
Bailormen,  the  railroad  crews,  the  store  clerks 
whom  we  face  across  counters,  the  bankers  and 
their  clerks  who  transfer  credits,  the  builders  of 
houses,  factories  and  machines,  the  army  of  work- 
men of  every  grade  from  drudge  to  manager,  serve 
•as  as  effectively  as  the  genii  of  his  lamp  served 
Aladdin,  but  in  very  truth  instead  of  Oriental 
fable. 

Now  what  do  we  do  for  our  fellows  in  return 
for  their  service  to  us  ? 

If  we  turn  our  thoughts  from  their  serviceable 
activities,  inward  upon  our  own  activities,  we 
shall  find  that  in  some  way  we  too  (unless  we  are 
idle  pensioners  upon  our  brethren,  or  industrious 
only  as  parasites)  are  contributing  our  share  to 
the  ceaseless  interflow  of  social  service. 

As  lawyer,  doctor,  actor,  author,  teacher,  me- 
chanic, farmer,  or  what  you  will,  everybody  who 
pays  his  way  is  serving  others  even  as  they  serve 
him;  and  the  reason  that  they  serve  him,  unless 
they  act  from  coercion,  personal  affection,  or  pity, 
is  because  he  serves  them.  Social  service  is  in  its 
last  analysis  an  intricate  interchange  of  individual 
services. 


INTRODUCTION  9 

If  all  those  who  serve  were  to  stop  serving,  all 
who  are  served,  even  the  richest,  would  be  almost 
instantly  impoverished.  Concrete  accumulations 
ef  past  exchanges  of  service,  such  as  houses,  cloth- 
ing, food  supplies,  and  so  on,  would  be  of  little 
use  were  social  service  to  cease.  Though  houses 
would  still  exist  they  would  answer  for  little  more 
than  shelter  and  not  long  for  that,  and  meanwhile 
each  of  us  would  have  to  be  his  own  housekeeper ; 
though  food  were, in  the  larder  the  supply  would 
be  exhausted  soon,  and  meanwhile  each  of  us 
would  have  to  be  his  own  cook.  Interchanges  of 
service,  when  normal — that  is,  when  free  to  flow 
in  accordance  with  the  need  for  service  and  the 
will  to  serve, — maintain  an  equilibrium  at  which 
the  service  that  each  renders  to  others  is  balanced 
by  the  service  that  others  render  to  him. 

This  balance  is  obvious  enough  when,  for  in- 
stance, Farmer  Doe  does  a  day's  work  for  Farmer 
Eoc  at  haying,  in  exchange  for  a  day's  work  in 
harvest.  There  is  no  complexity  in  such  a  case.  The 
two  farmers  could  easily  keep  the  accounts.  A 
debit  in  Doe's  books  and  a  credit  in  Koe's  of  one 
day's  work  to  Farmer  Eoe  at  haying,  is  balanced 
in  both  books  by  a  cross  credit  and  a  cross  debit 
at  harvest  time.  But  if  Doe's  little  boy  should 
swap  an  egg  for  a  stick  of  candy  at  the  store,  or 
Mrs.  Doe  trade  butter  for  groceries,  a  great  com- 
plexity would  be  introduced.  The  army  of  candy 
makers,  beginning  with  sugar  planters  and  run- 
ning through  the  long  list  of  workmen  in  refinery 
and  factory  and  railroading  and  ocean  navigation, 
and  the  armies  of  machinists  and  builders  behind 
them  all — these  have  no  debit  and  credit  account 
with  Mr.  Doe  or  any  member  of  his  family. 
Neither  have  the  army  of  grocery  producers. 
Perhaps  none  of  them  but  the  grocer  ever  heard 
of  him;  nor  did  any  of  them  work  especially  for 
him  or  his  wife  or  his  little  boy.  They  worked 


10  SOCIAL    SERVICE 

for  whomsoever  there  might  be  to  want  the  final 
consumable  product  of  their  work,  though  at  the 
end  of  a  thousand  manufacturing  transmutations 
and  commercial  exchanges.  In  our  illustration  it 
would  have  been  the  Doe  boy  that  happened  to 
want  that  particular  stick  of  candy,  and  the  Doe 
family  that  happened  to  want  those  particular 
groceries.  But  this  would  only  have  happened  so. 
The  boy  might  have  wanted  other  candy  or  the 
family  other  groceries,  made  and  transported  in 
part  at  least  by  other  workmen.  Yet  the  social 
service  of  Farmer  Doe  is  as  truly  balanced  off 
when  the  exchange  is  for  candies  or  groceries  at 
the  store  as  when  it  is  for  a  day's  work  with  a 
neighbor.  The  difference  is  only  a  difference  in 
the  extent  and  intricacy  of  interchange.  In  es- 
sentials there  is  no  difference. 

It  may  have  been  tedious  to  you,  my  friend,  to 
thread  your  way  through  all  this  detail,  and  you 
may  have  been  a  little  bored  with  the  "damnable 
iteration."  But  it  will  help  you  to  generalize  the 
industrial  phenomena  that  come  under  your  ob- 
servation ;  and  this  is  necessary  if  you  care  to  un- 
derstand the  natural  laws  of  social  service.  While 
we  all  know  that  social  service  consists  of  an  in- 
finite complexity  of  individual  exchanges,  we  are 
so  accustomed  to  thinking  of  the  subject  loosely 
or  not  at  all,  that  we  are  apt  to  find  ourselves  at 
sea  when  we  come  to  test  unfamiliar  generaliza- 
tions. Especially  do  we  fail  to  associate  what  is 
commonly  called  trade,  with  social  service  as  an 
indispensable  characteristic.  Haven't  you  your- 
self been  derelict  in  this  respect?  But  now,  as 
you  recall  the  thread  of  our  thought,  don't  yon  see 
that  civilized  life  is  in  some  sort  a  social  organ- 
ism of  infinite  complexity,  which  derives  its  vital- 
ity from  the  interflow  of  trade — from  intricate 
interchanges  of  innumerable  individual  services? 

This  social  organism,  like  any  other  organism, 


INTRODUCTION  11 

must  be  explainable.  There  must  pertain  to  it  a 
science  or  know-why,  which,  wheij  the  true  lines 
of  inquiry  are  perceived,  will  enable  us  to  under- 
stand its  normal  conditions  and  to  detect  and  ac- 
count for  abnormal  or  diseased  manifestations.  By 
whatever  name  this  science  may  be  called — as 
economics,  political  economy,  catallactics,  or  what 
you  please — it  must  be  evident,  if  you  reflect  upon 
the  industrial  phenomena  we  have  run  lightly 
over,  that  in  so  far  as  it  may  be  a  science  at  all  it 
must  be  the  science  which  accounts  for  the  phe- 
nomena of  social  service. 

Nor  is  it  necessary  to  an  understanding  of  this 
science  that  you  should  be  familiar  with  those  be- 
wildering details  and  elusive  complexities  of  ex- 
change about  which  we  have  talked.  It  would  be 
as  possible  for  you  to  direct  every  line  of  service  as 
to  apprehend  the  complex  relations  of  each  indi- 
vidual act  of  service  to  every  other.  You  could  do 
neither.  In,running  lightly  over  those  details  to- 
gether we  had  no  purpose  of  comprehensively  pur- 
suing their  ramifications;  it  was  only  to  indicate 
and  emphasize  the  interrelation  of  all  such  de- 
tails. What  one  needs  to  grasp,  for  an  under- 
standing of  the  science  of  social  service,  is  not  the 
details  themselves,  but  the  fact  of  the  intricate 
interrelation  of  all  such  details  in  one  great  phe- 
nomenon— the  co-operative  life  of  man.  To  re- 
alize how  mankind  considered  as  a  social  whole 
makes  a  living,  is  the  needful  thing.  We  shall 
be  helped  in  doing  this  if  we  recur  to  our  dinner 
at  the  restaurant. 

Why  was  that  dinner  served  upon  our  order? 

It  was  not  a  chummy  affair,  except  between  you 
and  me.  The  waiters  and  the  cook  and  the  pro- 
prietor acted  from  another  impulse  than  that  of 
personal  comradeship.  Theirs  was  the  impulse  of 
bnainesB,  not  of  sociability.  Perhaps  they  en- 
joyed serving  na;  perhaps  their  sentiments  were 


12  SOCIAL     SERVICE 

profoundly  fraternal.  Let  us  hope  BO.  All  social 
service  should  be  vitalized  with  the  spirit  of  f  ra- 
ternalism.  But  would  we  have  thanked  them  for 
giving  us  the  dinner  for  nothing?  I  think  not. 
We  should  have  considered  the  offer  an  imperti- 
nence. For  f raternalism  means  equilibrium,  bal- 
ance, service  for  service.  What  service,  then,  did 
we  render  for  that  dinner  ? 

So  far  as  we  can  follow  out  the  details  through 
their  intricate  windings  we  are  unable  to  show 
that  we  gave  for  it  any  service  at  all.  You  work 
as  a  doctor  and  I  work  as  a  lawyer ;  but  you  have 
done  no  "doctoring"  nor  I  any  "lawing"  for  a 
single  person,  as  far  as  we  know,  who  helped  fur- 
nish that  dinner.  Nor  does  either  of  us  ever  ex- 
pect to,  or  any  of  them  expect  it  of  us.  Why, 
then,  did  they  furnish  the  dinner?  If  none  of 
them  had  been  served  in  any  way  by  us,  if  none 
of  them  expected  to  be  served  by  us,  yet  if  they 
were  serving  us  on  the  basis  of  service  for  serrice, 
why  did  they  serve  us  who  probably  have  not 
served  them  and  probably  shall  not?  Ask  our 
friend  Joseph,  he  who  marshaled  in  due  season 
and  due  proportion  all  the  cooperative  service  of 
the  world,  including  his  own,  that  was  necessary 
to  minister  to  our  gustatory  wants  of  that  hour. 
He  will  tell  you.  And  in  whatever  phrase  he  may 
reply,  his  answer  will  be  that  he  expected  us  to 
give  him  money  according  to  an  agreed  price. 

Isn't  that  what  we  did  in  fact  ?  And  wasn't  he 
satisfied  with  it?  What  then  is  money,  that  Jo- 
seph should  have  taken  it  for  service  from  him 
and  his  co-operators  to  us,  in  lieu  of  service  from 
us  to  him  and  them? 

Money — well,  for  the  present  let  us  say  that 
money  is  a  certificate  of  title  to  social  service. 
That  was  the  function  it  performed  for  us.  We 
gave  it  as  a  means  whereby  Joseph  should  pay  in 
the  social  service  market  for  the  particular  charac- 


INTRODUCTION.  13 

ter  of  service  he  might  be  already  indebted  for,  or 
obtain  the  particular  character  of  service  he  might 
thereafter  desire.  We  transferred  to  him  our  title 
to  that  service. 

How  did  we  get  the  money  ?  You  must  answer 
that  question  yourself,  for  you  paid  our  dinner 
check.  If  you  picked  somebody's  pocket  for  it,  you 
haven't  paid  for  our  dinner — not  in  the  great 
"round  up"  or  equilibrium  of  social  service — even 
though  Joseph  is  satisfied.  The  man  you  robbed, 
and  not  you,  has  in  that  case  involuntarily  paid 
for  two  dinners  he  hasn't  had.  And  it  is  much 
the  same — don't  be  startled — if  the  money  was 
part  of  your  income  from  royalties  for.that  Penn- 
sylvania coal  deposit  in  which  you  have  an  in- 
terest. For  don't  you  see  that  you  can  no  more  pay 
for  dinners  with  coal  royalties  than  with  money 
picked  from  somebody's  pocket?  You  render  no 
service  to  anybody  by  giving  miners  permission  to 
work  natural  coal  deposits.  Why  not?  Because 
neither  you  nor  any  one  from  whom  you  get  title 
made  those  coal  deposits.  You  might  as  well  think 
you  were  rendering  human  service  by  permitting 
your  fellow  men  to  breathe  God's  air  as  by  per- 
mitting them  to  dig  God's  coal.  So  far  as  the 
equilibrium  of  social  service  is  concerned,  it 
doesn't  make  a  particle  of  difference  whether  you 
paid  for  our  dinner  with  money  picked  from  a 
pocket  against  the  law,  or  extorted  from  coal  min- 
ers according  to  law.  In  neither  case  do  you  ren- 
der a  service  for  the  service  you  get.  Who  does 
render  it  ?  We  haven't  the  time  to  inquire  into  that 
just  now.  It  is  enough  for  present  purposes  that 
in  either  of  these  instances  no  service  is  rendered 
by  you.  But  of  .course  you  didn't  pick  a  pocket; 
and  of  course,  if  you  paid  for  our  dinner  with  coal 
royalties  the  fault  is  no  more  yours  than  mine  and 
Joseph's  and  the  miners'  and  all  the  rest,  for  al- 
lowing our  laws  to  give  an  institutional  advantage 


14  SOCIAL     SERVICE 

to  you.  In  fact  you  got  the  money  from  a  patient 
for  hard  work?  Very  good,  then  it  is  you  that 
have  paid  for  our  dinner.  Nor  does  it  make  any 
difference,  so  far  as  you  and  I  and  Joseph  are  con- 
cerned, whether  your  patient  rendered  service  for 
the  money  he  gave  you  or  not.  If  he  did  not,  then 
he  has  failed  to  that  extent  to  maintain  the 
equilibrium  of  social  service.  But  you  have  not 
failed.  You  have  maintained  the  equilibrium  of 
social  service  for  yourself  by  earning  your  own 
dinner,  and  for  me  in  the  hospitality  of  friendship 
by  earning  mine. 

The  certificate  of  your  service  in  the  form  of 
money  you  have  passed  over  to  Joseph,  and  upon 
him  rests  the  responsibility  of  putting  that  cer- 
tificate into  the  proper  channels  for  transferring 
your  right  to  social  service,  to  the  extent  of  that 
amount  of  money,  to  all  the  co-operators  who  have 
contributed  their  service  to  the  making  of  our 
dinner. 

As  with  our  dinner,  so  with  all  the  other  forms 
of  service  to  which  we  have  referred.  Two  nickels 
gave  us  our  street  car  ride.  A  greenback  "squared" 
you  with  the  grocer.  Your  clothing  bill  was  bal- 
anced and  your  landlord  was  appeased  with  checks 
or  orders  upon  your  bank  to  pay  money  to  the 
amount  of  the  agreed  value  of  their  service  to  you. 
That  handsome  gold  watch  which  you  have  just 
put  back  into  your  pocket, — didn't  you  buy  it 
with  money?  And  didn't  Hyman-Berg  take  the 
money  in  exchange  for  their  service  to  you  in 
letting  you  have  the  watch?  Wasn't  it  their  pay, 
to  their  complete  satisfaction,  for  having  mar- 
shaled the  multifarious  services  of  an  army  of 
workers  in  order  to  bring  into  their  stock,  in  per- 
fect condition,  through  all  the  transmutations  and 
transportations  of  watchmaking,  from  the  natural 
state  of  its  raw  materials  in  the  mines,  and  to  hold 
in  store  for  your  purchase  at  your  pleasure,  that 


INTRODUCTION  16 

delicately  contrived  mechanism  of  magic  service- 
ableness?  As  you  had  given  your  service  for  the 
money  with  which  you  bought  the  watch,  you  gave 
your  service  for  the  watch  you  bought  with  the 
money.  Although  money  is  not  service,  it  is  a 
means  whereby  interchanges  of  service  are  effect- 
ed. It  is  in  the  nature  of  a  certificate  of  service 
rendered  by  its  possessor,  which  is  redeemable  in 
service  to  be  rendered  for  its  possessor. 


CHAPTER  II. 
The  Use  of  Money  in  Social  Service. 

Is  it  true  that  "the  love  of  money  is  the  root  of 
all  evil"?  True!  Isn't  it  tremendously  true? 
Whenever  we  question  its  truth  we  are  influenced, 
I  suspect,  by  a  false  emphasis.  We  think  of 
money — not  "love  of  money,"  mind  you,  but 
"money" — as  being  the  root  of  all  evil,  and  at 
this  our  common  sense  revolts.  But  instead  of 
questioning  our  loose  interpretation  of  the  epi- 
gram and  correcting  the  careless  emphasis  that 
causes  it,  we  rashly  question  the  epigram  itself. 

Love  of  money  is  indeed  the  root  of  all  evil. 
It  is  essentially  the  same  thing  as  love  of  domin- 
ion. Either  includes  love  of  theft,  love  of  power 
to  take  something  for  nothing,  love  of  getting 
service  without  giving  service.  But  this  phase  of 
the  subject  of  money  belongs  with  its  abuse  rather 
than  its  use,  and  we  ought  to  consider  the  latter 
first.  That  is  what  you  would  advise,  Doctor, 
wouldn't  you,  if  the  subject  were  physiological? 
Wouldn't  it  be  putting  the  cart  before  the  horse, 
to  consider  the  pathology  of  a  subject  without 
a  fairly  definite  apprehension  of  its — -may  I  say 
its"healthology"? 

We  did  reflect  somewhat  upon  the  social  use  of 
money,  you  and  I,  in  rounding  out  our  after- 
dinner  talk  at  Joseph's  restaurant,  though  only  in 
a  general  way.  Some  consideration  of  it  was 
necessary,  however,  for  we  were  talking  of  social 
service.  Indeed,  it  was  unavoidable.  Money  ia 
to  intimately  associated  with  the  phenomena  of 


USE     OF    MONEY  17 

social  service  that  neither  can  be  considered  with- 
out the  other. 

The  circumstances  of  that  occasion  brought  out 
very  concretely  the  subject  of  the  social  use  of 
money.  Had  you  not  just  given  money  to  our 
friend  Joseph,  the  proprietor  of  the  restaurant, 
for  our  dinner?  And  had  he  not  taken  it  with 
satisfaction — even  with  a  "thank  you,"  as  if  the 
service  had  been  from  us  to  him  and  not  from 
him  to  us  ?  Had  we  not  seen,  also,  that  whenever 
and  wherever  we  got  social  service  of  any  other 
kind,  whether  in  the  form  of  street  car  rides,  or 
groceries,  or  clothing,  or  house  accommodations, 
or  what  not,  we  discharged  our  obligation  by  pay- 
ing money,  or  by  ordering  a  bank  to  pay  money 
out  of  our  account  and  on  our  behalf? 

Your  greenback  was  the  acceptable  quid  pro 
quo  for  our  dinner  at  Joseph's,  although  it  was 
only  a  little  oblong  strip  of  greenish  paper  with 
printing  on  it,  and  although  Joseph  gave  you  back 
in  the  change  a  prettier  greenback  quite  as  large 
and  at  least  twice  as  new.  So  my  two  nickels  were 
taken  for  our  street  car  ride,  although  they  were 
only  two  little  pieces  of  stamped  metal.  The 
strip  of  paper  was  of  no  use  to  you  nor  the  metal 
to  me,  except  as  we  might  pass  them  on  to  other 
persons  for  social  service.  But  we  found  them 
so  useful  for  that  purpose  that  we  asked  our- 
selves the  reason. 

You  remember  our  conclusion.  We  satisfied 
ourselves  that  Joseph's  reason  for  taking  the 
greenback  for  our  dinner,  and  the  conductor's 
for  taking  the  nickels  for  our  street  car  ride,  was 
that  the  greenback  and  the  nickels  were  certifi- 
cates or  tokens  of  title  to  social  service.  Each 
took  them  from  us  in  exchange  for  social  service, 
because  he  knew  that  others  would  take  them 
from  him,  likewise  in  exchange  for  social  service. 
He  took  them,  that  is,  because  he  knew  that  they 


18  SOCIAL    SERVICE 

were  currency;  because  he  knew  that  they  would 
pass  current  as  tokens  of  service  in  the  intricate 
exchanges  of  the  social  service  market;  because  he 
knew  that  they  would  be  redeemed  at  sight  in 
social  service  by  anybody  who  wished  to  swap 
one  kind  of  social  service  for  another  kind.  They 
were  in  effect,  then,  what  we  have  already  called 
them — certificates  of  title  to  social  service. 

And  that  is  the  character  of  all  money.  It  is  a 
certificate  or  token,  passing  current  from  hand 
to  hand,  in  common  testimony  or  proof  to  all 
whom  it  may  concern,  that  the  possessor  has  good 
right  and  perfect  title  to  a  certain  measure  of 
any  kind  of  service  in  any  kind  of  form  which 
he  demands  and  which  the  social  service  mar- 
ket affords.  If  he  had  a  bill  of  sale  of  a  particular 
bicycle,  the  bill  of  sale  would  entitle  him  to  a 
particular  set  of  social  services  exerted  and  as- 
sembled in  the  form  of  a  certain  bicycle.  It 
would  entitle  him  to  nothing  else.  But  since 
he  has  money,  his  title  runs  to  any  bicycle,  in 
fact  to  any  set  of  social  services  whatever,  exerted 
and  assembled  in  any  form  he  pleases.  It  is  lim- 
ited only  in  extent ;  and  the  extent  is  limited  only 
by  the  value  which  the  money  denominates.  It 
may,  therefore,  be  rightly  said  that  money  is, 
within  the  limits  of  its  value-denomination,  a  bill 
of  sale  to  any  social  service  which  the  possessor 
asks  for. 

If  by  this  time  we  do  not  realize  that  the  social 
use  of  money  must  be  investigated  at  the  outset 
of  any  inquiry  into  the  intricacies  of  social  service, 
our  reflections  are  to  little  purpose.  At  tho  very 
threshold  of  the  inquiry,  look  we  in  whatever 
direction  or  at  whatever  concrete  manifestation 
we  may,  the  money  function  confronts  us.  Doubt- 
less we  shall  find  it  obtrusive  throughout,  if  we 
pursue  our  general  inquiry,  but  at  the  threshold 
it  confronts  us  in  a  peculiarly  impressive  way — in 


USE    OP     MONET  19 

a  way  so  impressive  as  to  send  our  thoughts  awry 
if  we  do  not  have  a  care.  A  little  intellectual  in- 
difference, only  a  little  careless  or  crooked  think- 
ing, and  we  might  find  ourselves  making  a  fetish 
of  money  in  more  senses  than  one.  We  might 
forget  that  money  is  only  a  social  token  or  rep- 
resentative, and  think  of  it  as  a  social  reality 
or  substance.  We  might  forget  that  the  terms  of 
money,  such  as  "dollars"  or  "pounds"  or  "francs" 
or  "marks",  are  only  nouns  in  the  vocabulary  of 
the  social  service  mart — mere  expressions  for  de- 
noting and  registering  units  of  social  service  in 
exchange.  Verbalists  put  the  word  above  the  spirit, 
the  phrase  above  the  thought,  the  token  above  the 
substance ;  and  you  and  I,  unless  we  are  cautious 
in  our  thinking  about  social  service,  may  fall 
into  the  pit  of  verbalism  by  putting  mere  money 
tokens,  or  mere  money  terms,  above  the  substance 
of  social  services  whose  transmutations  and  trans- 
fers and  relative  utilities  the  money  tokens  merely 
measure  and  the  money  terms  merely  register. 

Shall  we  avoid  that  danger?  We  may  find  it 
worth  our  while,  even  at  the  expense  of  a  little 
laborious  thought.  Thinking  is  indeed  laborious — 
exact  thinking — but  it  pays.  And  though  it  were 
only  for  amusement,  what  could  compare  with  the 
unraveling  of  such  a  tangle  as  that  into  which  the 
use  and  abuse  of  money  and  the  terms  of  money 
involve  the  processes  of  social  service?  Wouldn't 
you  rather  have  the  fun  of  unravelling  this  tangle 
than  the  fun  of  winning  with  your  "partner's 
best"  at  euchre,  or  keeping  your  chum  out  of 
the  "king  row"  at  checkers  ?  And  really  no  great 
learning  is  needed.  There  isn't  an  illiterate  dish- 
washer in  Joseph's  kitchen  who  cannot  do  it  if 
he  tries,  just  as  he  can  untangle  a  perverse  fish 
line  if  he  tries.  Although  intellectual  training  is 
necessary,  the  peculiar  training  of  scholarship  is 
not.  The  necessary  training  is  only  what  is  requi- 


20  SOCIAL     SERVICE 

site  for  all  good  work,  from  the  humblest  up — 
the  training,  that  is,  that  quickens  clear  think- 
ing. Some  of  the  greatest  scholars,  men  distin- 
guished as  economists  and  sociologists,  men  of 
wide  reading  and  phenomenal  verbal  memories,  get 
confused  in  social  service  tangles.  It  is  because 
they  do  not  think  clearly.  Other  men,  without 
scholarship,  without  pretension  or  distinction,  with 
little  reading  and  abominable  verbal  memories, 
readily  resolve  the  confusions  of  social  service  into 
their  simple  elements  and  unravel  the  tangle. 
This  is  because  they  do  think  clearly. 

What  do  I  regard  as  the  most  baffling  confu- 
sions in  which  the  use  of  money  involves  us? 
To  answer  that  question  I  shall  have  to  recur, 
even  at  the  risk  of  repetition,  to  the  common 
tendency  to  ignore  the  importance  of  the  simplest 
and  iriost  obvious  characteristic  of  money — its 
quality  of  being  in  the  exchanges  of  social  services 
only  an  intermediary.  We  agree  to  this  readily 
enough,  but  even  while  the  statement  echoes  in 
our  ears,  and  though  our  tongues  may  glibly  re- 
peat it,  we  seem  oblivious  to  its  importance  as 
soon  as  we  set  about  unravelling  the  social  service 
tangle.  Haven't  you  forgotten  it  already  ?  Don't 
apologize.  This  is  one  of  the  points  at  which 
most  of  us  neglect  to  think  clearly.  It  is  a  point 
therefore  at  which  our  faculties  for  clear  thinking 
need  quickening. 

But  that  is  not  an  easy  matter,  let  me  tell  you. 
The  fallacy  that  money  instead  of  service  is  the 
one  thing  needful  in  social  life,  is  bred  in  the  bone. 
One  of  our  earliest  cognitions  as  children  is  the 
potency  of  money  to  secure  the  gratification  of  our 
wants.  A  penny  will  buy  candy.  Our  inclination, 
therefore,  if  we  want  candy,  is  to  consider  not  how 
to  render  a  service  in  exchange  for  it,  but  how  to 
get  a  penny  to  buy  it  with.  The  problem  may  be 
solved  by  a  generous  grandfather,  or,  if  you  are 


USB    OF    MONEY  21 

a  country  boy,  by  the  lucky  find  of  a  horseshoe  in 
the  road  which  will  sell  for  a  penny  at  the  black- 
smith's or  the  foundry,  or  by  an  opportunity  to 
help  drive  marauding  cattle  out  of  the  cornfield 
for  a  neighbor,  or  to  turn  a  flock  of  sheep  from 
a  byway  back  into  the  highway,  or,  if  you  are  a 
city  boy,  to  run  out  and  get  your  father  a  Sunday 
paper.  But  the  thought  of  the  boy  is  always 
centered  upon  the  penny.  He  is  indifferent  as  to 
whether  it  is  earned  or  unearned.  His  thought  is 
centered  upon  it  as  upon  something  magical  for 
getting  candy  with,  and  never  upon  the  human 
reality  of  a  swap  of  social  service  in  candy  form 
for  social  service  in  some  other  form.  And  in 
this  respect  the  boy  is  father  to  the  man.  As  he 
grows  up,  one  experience  after  another  confirms 
the  boyish  habit  of  thought.  He  may  try  to 
force  himself  into  straight  thinking  about  it, 
but  the  habit  pesters  his  thinking  processes  in 
spite  of  himself.  Like  the  man  who  could  never 
tell  which  way  to  turn  for  east  without  stopping 
to  "figure  it  out/'  we  are  seldom  able  to  realize 
instinctively,  but  must  always  "figure  it  out," 
that  money  is  a  mere  trading  certificate  or  token. 
Some  men  never  reach  the  point  even  of 
"figuring  it  out."  Very  well  do  I  remember  the 
earnest  way  in  which  a  good  Greenbacker  friend 
of  mine  once  assured  me  that  money  is  the  one 
thing  needful  for  human  comfort.  "It  is  the  last 
thing  you  want,"  he  urged  with  waxing  eloquence, 
"before  you  go  to  bed  at  night,  and  the  first  thing 
you  want  when  you  get  up  in  the  morning!"  "Oh, 
no,"  I  interrupted,  "money  is  not  the  first  thing 
I  want  in  the  morning.  What  I  want  then  is  my 
breakfast."  In  a  tone  of  gentle  impatience  he 
replied :  "But  if  you  have  money  you  can  get  your 
breakfast."  Isn't  that  like  the  child?  Just  as 
the  child  thinks  of  money  as  the  open  sesame  to 
any  of  the  candy  jars  in  the  store,  grown-ups 


22  SOCIAL    SERVICE 

think  of  it  as  the  open  sesame  to  any  of  the  good 
things  of  the  world.  "If  I  only  had  the  money  P 
It  is  the  universal  cry.  "If  I  only  had  the  money, 
I  would  buy" — this  or  that.  And  don't  we  reckon 
the  social  power  and  usefulness  of  men  by  their 
money's  worth? 

In  a  sense,  then,  my  friend  was  right.  Truiy, 
I  could  get  my  breakfast  if  I  had  the  money. 
Didn't  we  get  our  dinners  the  other  day  because 
you  had  the  money  to  buy  them  with  ?  With  money 
we  can  get  any  commodity  in  the  market,  we  can 
command  any  service  that  men  are  accustomed  to 
rendering  their  fellow  men.  In  fact,  we  may 
in  some  circumstances  command  services  they  are 
not  accustomed  to  rendering,  and  which  they  re- 
coil from  rendering — if  we  have  the  money.  But 
though  we  beg  our  brethren  to  serve  us,  yet  if  we 
have  no  money  they  will  either  turn  away  or 
serve  us  superciliously,  meagerly  and  grudgingly. 
However  great  our  need,  we  cannot  satisfy  it  if 
we  are  without  money.  Should  we  go  into  a 
restaurant  hungry,  but  having  no  money,  we 
shall  find  neither  food  nor  service  at  our  com- 
mand, unless  we  are  trusted,  which  will  be  only 
if  we  are  known  to  be  able  to  get  money  pres- 
ently and  to  be  willing  to  pay  our  debt?  Instead 
of  being  served  at  this  faucet  of  the  world's  great 
reservoir  of  social  service,  we  shall  be  turned  out 
upon  the  street — if  we  have  no  money.  Though 
we  offer  commodities  in  exchange  for  a  dinner, 
the  Josephs  who  know  us  not  will  either  decline 
them  or  accept  them  with  reluctance  and  as  a 
great  favor.  If  we  offer  to  work  for  our  meal, 
the  kind  of  work  that  we  can  do  will  be  rejected. 
It  is  not  needed  at  the  moment,  and  with  money 
it  can  be  got  of  others  when  it  is  needed.  Or  if 
it  so  happen  that  we  can  do  work  that  may  be 
needed  at  the  moment,  such  as  shoveling  snow 
from  the  sidewalk  after  a  blizzard,  the  restaurant 


USE     OF     MONEY  23 

may  give  us  a  meal  for  it ;  but  this  will  be  some- 
what as  a  favor,  and  we  shall  probably  be  obliged 
to  eat  on  the  back  steps  like  a  beggar,  or  in  the 
kitchen,  instead  of  in  the  dining  room.  We  shall 
not  be  treated  in  those  circumstances  like  an  in- 
dependent social  servitor  with  ready  money  in 
testimony  of  his  social  usefulness.  But  if  we  have 
money  ever}rbody  will  serve  us  with  alacrity,  be 
we  hungry  or  thirsty  or  unfitly  clothed,  or  what- 
ever our  need.  They  will  do  it  for  the  asking, 
if  we  have  money;  and  when  we  pay  them  they 
will  thank  us.  And  as  with  them  toward  us,  so 
with  us  toward  others.  Money  is  the  one  thing 
that  they  think  they  want;  it  is  the  one  thing 
that  we  think  we  want. 

Wasn't  my  friend  right  in  his  estimate  of  the 
supreme  importance  of  money  ?  Yes,  in  a  sense ;  I 
have  already  said  he  was  right  in  K  sense.  He  was 
right  in  the  same  sense  in  which  all  of  us  are 
right  when  we  speak  of  sunrise  and  sunset.  There 
is,  in  fact,  neither  sunrise  nor  sunset,  and  we  all 
know  it;  but  there  is  an  appearance  of  both,  and 
we  have  a  habit  of  mind  which  makes  us  think 
and  speak  of  these  false  appearances  as  if  they 
were  actualities.  For  all  colloquial  purposes  it 
is  as  well,  it  may  be  better,  to  think  and  speak 
simply  of  sunrise  and  sunset  in  preference  to 
using  some  paraphrase  indicating  the  sun's  stabil- 
ity and  the  earth's  rotation.  But  the  science  of 
astronomy  will  tolerate  no  such  looseness.  When  we 
reason  about  the  phenomena  of  suns  and  planets, 
we  must  banish  mere  appearances  from  our  minds 
and  think  of  the  relations  of  the  sun  and  the  earth 
as  they  are.  So  it  is  with  the  use  of  money.  In  in- 
definite conversations  or  musings,  in  business  in- 
tercourse where  all  speech  is  in  terms  of  money, 
in  any  of  the  superficial  social  relations  in  which 
money  cuts  a  figure,  we  may  speak  and  even  think 
of  money  as  the  one  thing  needful  for  human 


24  SOCIAL     SERVICE 

comfort.  We  may  in  those  circumstances  regard 
it  as  the  object  of  the  services  we  render  and  the 
magical  charm  that  commands  for  us  the  services 
of  others.  We  may  think  of  money  as  "making  the 
mare  go,"  or  the  world  for  that  matter,  much  as 
we  think  of  the  sun  as  rising  in  the  morning  and 
setting  at  night.  But  just  as  in  astronomical  in- 
quiries we  recognize  terms  like  "sun  rise"  and 
"sun  set"  as  figures  of  speech,  so  when  we  try 
to  reason  definitely  about  the  relation  of  money 
to  the  intricate  and  often  confusing  processes  of 
social  service,  we  must  strike  through  the  crust 
of  superficial  appearances  and  get  down  to  the 
final  facts. 

What  is  required  of  us  in  doing  this  is  not 
difficult  in  itself,  though  we  encounter  all  the  dif- 
ficulties of  overcoming  loose  habits  of  thought. 
We  have  only  to  subject  familiar  things,  things 
-of  common  observation,  to  the  simplest  opera- 
tions of  clear  thinking.  When  we  do  this  we 
realize  that  there  is  no  inherent  social  power  in 
money.  No  one  takes  money  for  its  own  sake. 
In  itself  it  satisfies  no  human  want.  The  ma- 
terial might,  if  deprived  of  the  money  stamp; 
but  the  money  itself,  in  its  current  form  as  money, 
is  useless  for  any  other  purpose  than  that  of  a 
token  for  effecting  exchanges  of  things  that  do 
satisfy  human  wants. 

When  money  performs  this  function  it  is  be- 
cause it  is  current  in  the  community  in  which  it 
performs  it.  Outside  of  that  community  it  may 
have  no  currency,  and  when  this  is  the  case  it  does 
not  facilitate  exchanges  of  social  service.  It  is 
no  longer  money.  Did  you  never  "get  stuck"  with 
a  Canadian  quarter  ?  It  was  as  good  a  piece  of  sil- 
ver as  any  one  of  our  own  quarters,  and  in  the 
melting  pot  would  have  been  as  useful  and  worth 
as  much.  But  not  so  for  fare  on  an  American 
street  car  at  a  considerable  distance  from  the 


USE    OF    MONEY  255 

Canadian  border.  Though  current  money  in  Can- 
ada, it  is  not  current  money  with  us.  Money 
that  passes  current  does  so  because  everyone  who 
takes  it  knows  it  will  be  taken  on  equal  terms 
by  anybody  else  to  whom  he  may  have  occasion 
to  pass  it.  It  is  useful,  therefore,  because  and 
only  because,  and  to  the  extent  that  and  only  to 
the  extent  that,  it  is  current  in  the  social  service 
market. 

So  long  as  money  has  the  quality  of  currency,  it 
makes  no  difference  of  what  material  it  is  made. 
Though  the  material  be  nothing  but  a  strip  of 
paper,  yet  if  it  passes  current,  that  paper  is  money. 
One  strip  of  paper  may  buy  us  a  dollar  dinner, 
while  another  of  the  same  size  and  the  same  gen- 
eral appearance  may  buy  us  a  fifty  dollar  suit  of 
clothes.  But  why  only  a  dollar's  worth  in  the 
one  case,  and  fifty  in  the  other?  And  why  even 
a  dollar's  worth  for  a  strip  of  paper?  Because 
people  engaged  in  social  service  all  about  us  are 
known  to  be  ready  and  willing  to  render  service  in 
exchange  for  those  strips  of  paper — a  dollar's 
worth  of  service  for  a  strip  with  the  figure  1  upon 
it,  and  fifty  dollars'  worth  for  a  strip  just  like 
the  other  but  with  the  figure  50  upon  it.  These 
strips  of  paper  are  commonly  recognizable  as 
certificates  of  title  for  social  service,  and  as  such 
they  pass  from  hand  to  hand.  They  are  therefore 
current  money.  For  all  the  purposes  of  exchange 
in  the  social  service  market  they  are  just  as  ef- 
fective as  if  the  material  itself,  simply  as  a  com- 
modity, were  worth  as  much  as  the  social  service 
the  money  exchanges  for.  It  is  not  its  material 
that  makes  a  piece  of  money  current;  it  is  its 
stamp  or  imprint. 

Put  a  thousand  new  one-dollar  gold  pieces  into 
your  trunk,  and  you  are  equipped  for  a  journey 
anywhere  in  the  United  States.  The  stamp  will 
be  recognized  and  the  dollar  piece  be  received  in 


26  SOCIAL    SERVICE 

exchange  for  any  kind  of  social  service  you  want, 
and  by  any  one.  Instead  of  new  gold  pieces,  take 
old  ones,  considerably  abraded.  The  gold  will  be 
worth  less,  but  the  stamp  being  legible  these  pieces 
will  serve  you  just  as  well  as  the  others.  Hammer 
out  the  stamp,  and  neither  the  old  ones  nor  the 
new  ones  will  serve  you  as  current  money  at  all. 
You  will  have  to  go  to  a  gold  dealer  whenever  you 
need  money,  and  ask  him  to  weigh  and  test  and 
buy  your  gold,  and  in  the  end  you  will  get  less  for 
the  old  pieces  than  for  the  new  ones.  Go  out  of 
the  United  States  into  some  community  where  the 
American  dollar  stamp  is  unfamiliar,  and  you  will 
have  the  same  experience  with  your  gold  pieces, 
whether  the  new  ones  or  the  old  ones,  as  you 
would  have  in  the  United  States  if  you  obliterated 
the  stamp.  Now  put  a  thousand  new  one-dollar 
greenbacks  into  your  trunk,  and  you  will  be  as 
well  equipped  as  if  they  were  gold  pieces,  for  a 
journey  anywhere  in  the  United  States,  and  for 
the  same  reason.  The  familiar  denominational 
stamps  will  give  to  the  greenbacks  as  to  the  gold 
pieces  the  quality  of  currency.  Take  old  green- 
backs instead  of  new  ones,  and  your  experience 
will  be  the  same.  Tear  off  a  corner  from  one  of 
thfl  greenbacks,  and  nevertheless  it  will  pass  with- 
out question;  the  rest  of  the  greenback  will  still 
be  identified  as  current  money.  Tear  off  a  consid- 
erable piece,  and  the  remainder  will  lose  its  cur- 
rency. Destroy  the  currency  stamp  on  your 
greenbacks  by  putting  them  into  a  crucible,  and 
you  will  have  neither  currency  nor  material  left; 
the  residuum  will  be  charred  paper.  Destroy 
the  currency  stamp  on  your  gold  pieces  by  putting 
them  into  the  crucible,  and  you  will  still  have 
the  material  though  not  the  currency ;  the  residu- 
um will  be  merchantable  gold — something  that 
you  can  sell  like  wheat,  but  nothing  that  you  can 
pass  like  money.  Here,  then,  is  the  only  difference 


USB     OF     MONEY  27 

between  gold  and  paper  as  currency.  Destroy 
the  currency  quality  of  the  gold,  and  you  still 
have  a  valuable  commodity  left;  destroy  the  cur- 
rency quality  of  the  greenback,  and  you  have  only 
worthless  paper  left.  But  so  long  as  it  possesses 
the  currency  quality,  one  is  current  money  as  well 
as  the  other. 

Nor  does  it  make  any  difference,  so  far  as 
the  matter  of  distinguishing  differences  goes,  what 
the  form  of  the  currency  stamp  may  be  nor  who 
affixes  it.  While  usually  it  is  a  government  stamp, 
it  need  not  be  so.  The  essential  thing  is  that  the 
material,  whether  of  gold,  silver,  copper,  nickel 
or  paper,  shall  present  an  appearance  of  length, 
breadth,  thickness,  squareness,  roundness,  yellow- 
ness, greenness,  or  what  not,  which  the  people 
among  whom  it  circulates  as  money  readily  recog- 
nize as  characteristic  of  their  currency.  If  an  old 
shoe  came  within  that  description,  it  would  be  as 
good  money  as  coin  fresh  from  the  mint.  Money 
is  simply  a  commonly  recognized  representative 
of,  or  certificate  of  title  to,  the  value  of  the  social 
service  which  it  indicates.  So  long  as,  passing 
readily  from  hand  to  hand,  it  performs  that  func- 
tion, it  is  money,  be  the  material  what  it  may  be ; 
when  for  any  reason  or  no  reason  it  ceases  to  per- 
form that  function,  then,  however  valuable  the 
material  as  such,  it  is  no  longer  money. 

Even  the  genuineness  of  the  money  stamp,  like 
the  value  of  its  material,  is  of  no  importance  pro- 
vided the  money  be  current.  Of  course,  its  gen- 
uineness is  likely  to  be,  and  it  usually  is,  an  ex- 
ceedingly important  factor,  just  as  the  value  of  the 
material  may  be,  in  causing  and  maintaining  its 
use  as  currency.  But  it  is  the  currency  quality, 
however  caused  and  maintained,  and  not  the 
cause  of  this  quality,  that  distinguishes  current 
money  from  other  things. 

You  seem  especially  skeptical  about  the  unim- 


28  SOCIAL    SERVICE 

portance  of  genuineness.  But  doesn't  your  memory 
go  back  to  the  Civil  War,  when  counterfeit  shin- 
plasters  known  to  be  counterfeit  passed  current? 
The  fact  that  they  were  counterfeit  made  no  dif- 
ference so  long  as  nobody  cared  and  everybody  took 
them.  And  surely  you  have  heard  the  old  Green- 
back story  of  how  ten  purchases  were  made  with 
one  counterfeit  treasury  note.  The  first  purchaser 
had  found  the  note-  Supposing  it  to  be  genuine, 
but  unable  to  discover  the  owner,  he  passed  it  to 
a  grocer  for  groceries;  the  grocer  passed  it  to  a 
dry  goods  merchant  for  dry  goods,  and  he  to  an- 
other kind  of  merchant  for  something  else,  and 
so  on,  all  supposing  the  note  to  be  genuine,  until 
the  ninth  merchant  had  got  it  and  paid  it  to  the 
first  buyer  for  goods  in  which  the  latter  dealt.  Dis- 
covered then  to  be  counterfeit,  the  note  was  de- 
stroyed. But  it  had  paid  for  all  those  goods — for  all 
those  social  services.  That  is  to  say,  it  had  paid  for 
them  in  appearance.  In  fact,  however,  none  of 
those  goods,  none  of  those  social  services,  were 
paid  for  by  the  counterfeit  treasury  note.  They 
were  paid  for  by  one  another,  through  the  com- 
mercial exchanges  which  the  note  as  a  token  fa- 
cilitated. But  the  counterfeit  note  thereby  served 
the  purpose  of  current  money,  and  it  served  it  just 
as  well  as  if  it  had  not  been  counterfeit.  In  this 
story,  nobody  suffered  loss.  But  if  the  note  had 
not  got  back  through  the  circle  of  exchanges  to 
the  first  purchaser,  somebody  would  have  given  so- 
cial service  without  receiving  social  service  in  re- 
turn, just  as  if  the  note  had  been  good  and  been 
stolen.  As  it  was,  however,  a  complete  series  of 
exchanges  was  effected  by  that  counterfeit,  and 
genuine  money  could  have  done  no  more. 

Yes,  it  is  quite  true  that  the  genuine  shinplas- 
ters  and  greenbacks  of  the  Civil  War  period 
passed  at  a  discount  relatively  to  gold  money;  or, 
rather,  that  gold  sold  at  a  premium.  But  tfcie 


USE    OF    MONEY  29 

does  not  alter  the  fact  that  it  is  the  currency  qual- 
ity that  makes  money  serve  its  use.  The  differ- 
ence in  value  between  gold  money  and  paper 
money  was  not  due,  in  individual  transactions,  to 
fear  that  the  paper  money  would  not  be  fully  re- 
deemed in  gold  by  the  government.  Whether  or  not 
that  may  have  been  the  remote  cause,  the  immedi- 
ate and  all-sufficient  motive  was  fear  that  it  would 
not  be  fully  redeemed  in  social  service  by  the 
next  individual  to  whom  it  might  be  offered.  Had 
confidence  in  this  respect  prevailed,  it  would  have 
passed  current  at  par  with  gold.  What  influenced 
those  who  took  it  in  exchange  for  commodities  or 
services,  is  what  always  determines  the  currency 
of  money — the  question  of  what  the  next  man 
will  do.  And  that  is  what  regulated  its  value. 
It  is  what  regulates  the  value  of  all  currency. 

A  simple  word,  isn't  it? — that  word  "value." 
It  is  in  such  common  use  that  we  ought  to  have  no 
difficulty  about  it.  But  here  again  confusion 
creeps  in.  We  fall  into  the  habit  of  mixing  the 
idea  of  value  with  the  idea  of  desirability,  as  if 
the  former  were  wholly  due  to  the  latter,  or  even 
identical  with  it.  From  this  habit  our  thinking 
often  gets  all  snarled  up.  Don't  you  remember 
the  knife  you  described  as  one  of  the  most  "valu- 
able" things  you  possessed?  You  used  "valuable" 
in  the  sense  of  desirable,  which  is  truly  enough 
one  of  its  meanings.  You  didn't  happen  to  mis- 
lead me,  for  in  explaining  what  you  called  the 
"valuable"  qualities  of  the  knife,  you  described  its 
various  convenient  contrivances,  from  a  nail  blade 
to  a  cork  screw,  and  said  nothing  about  its  sala- 
bility,  which  would  have  suggested  the  other 
meaning  of  value.  You  really  meant  desirable, 
not  valuable,  didn't  you? 

In  such  conversations  careless  speech  is  seldom 
ambiguous.  We  may  refer  to  things  as  "valuable," 
with  the  meaning  sometimes  that  they  have  a  high 


30  SOCIAL     SERVICE 

degree  of  desirability,  and  sometimes  that  they 
have  a  high  degree  of  exchangeability  for  money ; 
for  it  is  not  very  important,  even  if  we  are  not 
exactly  understood.  But  when  we  try  to  think 
analytically  of  the  phenomena  of  social  service,  we 
must  not  indulge  in  verbal  looseness.  The  same 
word  must  always  be  used  for  the  same  thought, 
and  not  only  with  our  tongues  but  in  our  minds. 
Value  must  be  habitually  distinguished  from  de- 
sirability. 

This  is  no  mere  verbal  distinction  without  a 
substantial  difference.  An  object  may  have  great 
desirability,  and  yet  have  no  value.  The  ocean, 
the  air,  the  sun,  are  familiar  examples.  Nothing 
is  valuable  in  the  exclusive  sense  of  the  word 
"value,"  unless  it  is  both  desirable  and  scarce.  If 
it  is  not  desirable,  no  one  wants  it;  if  it  is  not 
scarce,  no  one  will  pay  anything  for  it.  The  prin- 
ciple also  holds  good,  of  course,  as  to  degrees  of 
desirability  and  scarcity,  and  therefore  as  to  de- 
grees of  value.  You  recognized  it  when  I  asked 
you  what  you  would  sell  your  "valuable"  knife 
for.  Your  reply  was:  "If  I  couldn't  get  another 
I  wouldn't  sell  this  one  for  a  hundred  dollars." 
But  as  you  could  have  bought  another  for  about 
five  dollars,  you  would  have  sold  yours  for  much 
less  than  a  hundred.  No  matter  how  high  the 
degree  of  desirability  of  such  knives  might  have 
been,  the  degree  of  their  scarcity  was  low,  and 
consequently  the  value  of  your  particular  knife 
was  low.  While  its  degree  of  desirability  was  es- 
timated by  you  at  a  hundred  dollars,  its  degree  of 
scarcity  was  demonstrated  by  the  social  service 
market  to  be  only  five  dollars.  Don't  you  see, 
then,  that  your  use  of  the  word  "value"  in  that 
instance  would  be  too  ambiguous  for  exact  think- 
ing ?  It  carries  an  element  of  meaning  which  does 
not  necessarily  belong  to  the  idea  of  desirability — 
the  element,  namely,  of  scarcity.  For  pur- 


USE    OF     MONEY  31 

poses,  then,  of  clear  thinking  about  the  phenomena 
of  social  service,  we  must  not  use  the  word  "value" 
as  a  synonym  for  "desirability."  We  must  use  it 
only  for  denoting  the  relation  of  desirability  to 
scarcity.  "Desirability"  means  one  thing;  "scarci- 
ty" means  another;  and  a  third  results  from  the 
conjunction  of  those  two.  The  third  thing  needs 
a  distinctive  name,  and  "value"  seems  appropriate 
enough  for  the  purpose. 

There  is  another  confusion  over  which  we  are 
apt  to  get  our  thinking  about  value  into  a  snarl, 
a  confusion  which  is  not  unlike  the  one  with  ref- 
erence to  money.  We  fall  into  the  habit  of  looking 
upon  value  as  something  by  itself,  quite  apart 
from  the  commodities  or  services  which  we  con- 
sider valuable.  But  value  is  not  an  actual  entity. 
It  is  merely  a  verbal  generalization  of  values,  and 
values  are  only  terms  of  comparison  in  trade — 
terms  of  exchangeable  comparison.  As  we  com- 
pare the  length  of  objects  by  linear  measure,  and 
their  mass  by  weight,  so,  after  a  manner — though 
not  literally,  for  we  cannot  have  definite  standards 
of  value  as  we  have  of  length  and  weight — but 
after  a  manner,  analogically  as  you  might  say,  so 
do  we  compare  degrees  of  exchangeability  in  terms 
of  value.  The  fundamental  consideration  in  all 
these  matters  is  not  the  terms  or  language  of  com- 
parison, such  as  length,  weight,  or  exchangeability, 
— feet  and  inches,  or  pounds  and  ounces,  or  dollars 
and  cents.  Neither  is  it  the  volume  of  any  of 
those  measurements.  It  is  the  objects  them- 
selves. If  you  and  I  were  to  swap  knives 
even,  the  value  of  the  two  knives  would 
be  equal  in  our  joint  estimation.  That  is 
to  say,  the  difficulty  of  replacing  either  would  in 
our  judgment  be  the  same.  Were  yon  to  give  me 
your  matchbox  to  "boot,"  that  would  imply  that 
in  our  judgment  the  difficulty  of  replacing  my 
knife  would  be  the  same  as  the  difficulty  of  re- 


32  SOCIAL,    SERVICE 

placing  your  knife  and  your  matchbox.  Translate 
these  negotiations  into  the  language  of  the  social 
service  market — where,  however,  the  stricter  meas- 
urements of  business  intercourse  would  prevail — 
and  my  knife  is  in  the  one  case  of  the  same  value  as 
yours,  while  in  the  other  it  is  of  the  aggregate 
value  of  your  knife  and  your  matchbox. 

That  indicates  all  that  value  is.  It  has  no  sub- 
stance. It  satisfies  no  desire.  It  is  not  a  thing  by 
itself.  It  is  merely  an  expression  of  judgment. 
Its  terms  are  terms  of  comparison,  enabling  us  to 
compare  the  desirability,  as  modified  by  the  scarci- 
ty, of  commodities  in  the  social  service  market. 
Valuation  is  useful  as  a  process  of  measurement. 
So  is  the  multiplication  table.  But  both  exist  only 
in  the  mind  as  abstractions.  The  political  econo- 
mists who  reason  about  value  as  if  it  were  a 
commodity,  a  desirable  object,  a  thing  in  itself, 
must  be  first  cousins  to  the  placard  writers  of 
those  department  stores  that  offer  "good  values  for 
sale  cheap/' 

One  of  the  vagaries  of  the  treatment  of  valua- 
tion as  a  commodity,  a  substance,  a  property  or  a 
possession,  is  almost  comical.  But  it  runs  into  very 
solemn  results,  as  I  shall  explain  some  of  these 
days  if  you  don't  get  tired  of  listening.  By  treat- 
ing valuation  in  this  way,  instead  of  treating  it 
as  one  of  the  methods  of  comparing  and  meas- 
uring property  for  purposes  of  exchange,  all  val- 
uations are  added  together  in  censuses,  for  the 
purpose  of  ascertaining  the  sum  of  the  world's 
wealth. 

Ye  gods!  Just  think  of  it,  Doctor.  Here  is 
your  horse,  worth  $150.  We  all  agree,  of  course, 
that  this  amount  ought  to  be  computed  in  a  cen- 
sus of  the  sum  of  the  world's  wealth ;  for  a  horse 
reared  and  trained  by  social  servitors  for  Iriman 
use  is  a  concreted  social  service,  an  object  which 


USE     OF     MONEY  33 

belongs  in  the  category  of  things  fitted  for  human 
use  by  human  art — one  of  the  artificial  objects, 
that  is,  which  the  books  call  "wealth."  But  I  have 
a  chattel  mortgage  of  $100  on  that  horse.  To  be 
sure,  this  isn't  true  as  matter  of  fact,  but  it  might 
be,  and  so  let  us  suppose  it.  Very  well,  isn't  that 
chattel  mortgage  worth  $100?  Isn't  it  an  item 
of  value?  Our  census  man  says  yes,  and  adds  it 
to  the  value  of  your  horse  in  summing  up  the 
aggregate  of  the  world's  wealth — $150  for  you 
and  $100  for  me,  making  $250  in  all,  as  far  as  he 
has  got  in  his  censusing.  To-morrow  maybe  he 
will  go  farther  and  find  that  I  have  hypothecated 
that  mortgage  with  old  Simon  D.  Sampson  to  se- 
cure my  promissory  note  for  $50.  If  the  census 
man  does  find  this  out  he  will  add  $50  more  to  the 
sum  of  the  world's  wealth.  And  so  he  will  go  on. 
But,  after  all,  what  is  the  true  sum  of  the  world's 
wealth  so  far  as  those  items  are  concerned?  Jnst 
$150 — the  value  of  the  horse — and  not  a  penny 
more. 

Yes,  yes;  that  mortgage  on  the  horse  is  worth 
$100  to  me.  But  doesn't  it  make  the  horse  worth 
$100  less  to  you?  And  don't  those  two  values 
cancel  each  other?  The  net  result  at  this  point 
is  that  I  own  two-thirds  of  your  horse.  The  chat- 
tel mortgage  has  value  to  me  because  it  is  a  certifi- 
cate of  title  to  an  interest  in  a  particular  species 
of  social  service — namely,  an  animal  reared  and 
trained  by  human  energy  to  serve  human  uses. 
The  making  of  that  mortgage  didn't  increase  the 
aggregate  of  the  world's  wealth,  and  its  destruc- 
tion wouldn't  diminish  it.  Your  business  rela- 
tions to  me  and  mine  to  you  are  affected,  but  that 
is  all.  And  isn't  this  true,  also,  of  that  note  of 
mine  which  old  Sampson  holds  and  which  I  have 
secured  by  hypothecating  my  chattel  mortgage  on 
your  horse?  My  Sampson  transaction  has  add- 
ed nothing  to  the  sum  of  the  world's  wealth.  The 


34  SOCIAL    SERVICE 

hypothecation  is  indeed  valuable  to  Sampson  to 
the  extent  of  $50;  but  by  just  so  much  it  is  the 
reverse  to  me.  He  owns  half  of  my  two-thirds  of 
your  $150  horse. 

Isn't  that  all  there  is  to  the  volume  of  $300  of 
value  which  the  statistician  loads  upon  the  back 
of  that  $150  animal  of  yours?  He  mistakes  cer- 
tificates of  interests  in  commodities  for  additional 
commodities,  certificates  of  title  to  wealth  for 
wealth  itself.  So  it  is  with  all  census 
figures  of  this  kind.  The  valuable  evi- 
dences of  title  with  the  names  of  which  we  are 
more  or  less  familiar,  valuable  to  those  of  us  who 
own  them,  and  correspondingly  anti-valuable  to 
those  of  us  whom  they  obligate,  must  be  balanced 
off  in  order  to  let  us  see  even  approximately  the 
sum  total  of  wealth  in  the  world. 

Our  value  statisticians  don't  seem  to  know  the 
first  principles  of  bookkeeping.  To  arrive  at  the 
balance  of  values  representing  the  world's  wealth, 
they  should  either  ignore  certificates  of  title  and 
obligations  altogether,  or  else  put  their  amounts 
in  both  columns  of  the  census  ledger.  In  that 
way  they  might  approximate  the  true  value  of 
the  /"world's  wealth.  And  don't  forget  that 
money,  too,  is  a  certificate  of  title.  Its 
indefiniteness  as  to  the  particular  property 
to  which  it  certifies  title  doesn't  take  it  out 
of  the  general  class.  So  money  should  be  treated 
in  the  same  way  in  the  census  as  chattel  mort- 
gages. While  we  may  count  the  net  value  of  mon- 
ey-material as  part  of  the  aggregate  wealth,  we 
must  not  count  denominational  values  in  that  cat- 
egory ;  or  if  we  do,  we  must  charge  off  the  differ- 
ence between  the  value  of  the  money-material  and 
the  denominational  value  of  the  money.  Money- 
material  is  like  your  horse — a  concreted  social 
service,  or  wealth.  But  the  difference  between  the 
of  money-material  and  the  denominational 


USE     OF     MONEY  85 

value  of  money  is  like  the  value  of  my  chattel 
mortgage  on  your  horse — the  value  of  a  mere  cer- 
tificate of  title  or  proprietary  interest.  The  value 
to  the  holder  is  offset  by  the  amount  of  some  one's 
obligation — its  credit  effect  by  its  debit  effect. 

And  that  isn't  quite  all  in  this  connection,  Doc- 
tor; there  is  something  even  more  important. 
Did  you  ever  look  at  the  statistics  of  the  value  of 
aggregate  wealth  in  slavery  times?  If  you  have 
done  so  with  any  care,  you  have  noticed  that  the 
market  value  of  slaves  was  counted  in  with  the 
value  of  horses,  houses,  cotton  and  grain.  But  I 
reckon  that  after  what  we  have  been  saying  it 
must  be  plain  enough  to  you  offhand  that  this 
statistical  habit  gave  a  grossly  false  result.  Wasn't 
Uncle  Tom  worth  $2,000  to  his  owner?  Very 
likely — to  his  owner  as  a  means  of  getting  social 
service  without  giving  social  service ;  but  not  for  a 
census  of  the  world's  wealth,  in  a  world  made  up 
of  enslaved  men  as  well  as  other  men.  Uncle  Tom 
was  worth  $2,000  to  his  owner  because  he  was 
under  a  legal  obligation  to  let  his  owner  retain 
all  his  earnings  above  his  keep.  Since  those  net 
earnings  were  likely  to  average  in  the  future  about 
enough  to  make  the  prospective  earner  worth  $2,- 
000  to  any  one  who  had  the  legal  right  to  withhold 
his  earnings  from  him,  Uncle  Tom  was  worth  in 
the  social  service  market  $2,000  to  his  owner. 
Yet  Uncle  Tom's  future  service,  no  matter  what 
you  say  of  his  past  service — his  future  service  and 
its  fruits  belonged  in  all  fairness  to  Uncle  Tom 
himself,  and  not  to  his  owner.  So,  if  they  were  to 
be  counted  at  all  in  the  census  as  a  first  entry,  they 
should  have  been  balanced  off  by  an  opposite  entry. 
If  Uncle  Tom's  owner  was  to  be  charged  in  the 
census  ledger  with  $2,000  for  this  item,  Uncle 
Tom  should  have  been  credited  with  the  same 
amount  before  a  balance  was  struck;  for  that 
which  society  was  to  give  Uncle  Tom's  owner,  one 


36 

of  its  members,  it  was  to  take  away  from  Uncle, 
Tom,  another  member.  Isn't  it  so  with  the  horse  ? 
No.  The  horse  isn't  a  man,  one  of  the  citizens 
of  the  world;  and  Uncle  Tom  was.  The  slave's 
yalue  to  the  owner  was  the  value  merely  of  an 
arbitrary  power  of  one  man  over  another  man. 

Keduce  any  man  to  slavery  and  you  increase 
the  income  power  of  the  owner,  but  at  the  same 
time  you  reduce"  the  income  power  of  the  slave; 
the  assets  of  the  world  are  unaffected.  Abolish 
slavery  and  you  reduce  the  income-power  of  the 
owner,  but  you  increase  the  income  power  of  the 
slave;  the  aggregate  of  income  power  remains  the 
same.  The  value,  then,  of  such  property  as  slaves 
is  no  more  a  census  value  than  is  the  value  of  my 
chattel  mortgage  on  your  horse. 

Possibly  you  think  that  statistics  of  this  kind 
went  out  of  fashion  with  slavery.  They  didn't. 
Look  at  old  Sampson's  vacant  building  lot  across 
the  street.  Do  you  know  how  it  figured  in  the 
last  census?  Just  about  as  Uncle  Tom  used  to. 
It  figured  as  an  item  of  $2,000  in  the  sum  of  the 
world's  wealth.  Now,  isn't  that  absurd?  Why, 
it's  the  same  old  lot  and  in  the  same  old  condition 
as  when  Noah  disembarked  on  Ararat.  It  had  no 
census  value  then;  why  should  it  have  any  now? 

What  does  this  $2,000  of  census  value  mean? 
Well,  I'll  tell  you  what  it  means.  It  means 
precisely  what  Uncle  Tom's  value  meant.  It 
means  that  Sampson,  old  Simon  D.,  the  owner  of 
that  building  lot,  has  the  legal  right,  without  ren- 
dering any  social  service  himself,  to  take  for  his 
own  enjoyment  part  of  the  earnings  of  any  social 
servitors  who  may  use  that  building  lot  for  pur- 
poses of  social  service.  His  power  in  this  respect 
is  valued  at  $2,000  by  the  social  service  market. 
To  him,  then,  it  has  that  value,  just  as  Uncle 
Tom  had  to  his  owner.  But  to  the  rest  of  the 
world,  to  the  social  service  market — and  that  i» 


USE    OF    MONEY  37 

the  point — it  has  no  value  at  all;  no  more  than 
Uncle  Tom  had.  Anything  that  Sampson  gets 
for  the  use  of  that  building  lot,  which  hasn't  been 
improved  by  any  of  its  owners,  somebody  else 
must  pay.  His  gain  is  the  social  service  market's 
loss.  To  count  such  an  item  in  the  sum  of  the 
world's  wealth  is  as  absurd  as  saying  that  poor 
thriftless  old  Jimmy  Schuyler  is  worth  fifty  dol- 
lars because  that  is  what  he  says  he  would  sell  his 
wife  for,  whenever  he  gets  drunk. 

The  value  of  Sampson's  building  lot  doesn't 
represent  social  sendee  done  or  being  done,  any 
more  than  Uncle  Tom's  slave  value  did.  It  mere- 
ly represents  a  legal  power  in  one  man  to  exact  a 
share  of  social  service  yet  to  be  done.  Abolish  that 
power  and  the  world  is  not  a  dollar  the  poorer. 
Sampson  might  lose,  but  others  would  correspond- 
ingly gain.  No,  I  am  not  getting  into  my  "single 
tax  fad,"  either.  Wholly  irrespective  of  that  ques- 
tion, any  census  which  includes  in  the  aggregate 
of  social-service  values,  such  things  as  land  values, 
slave  values,  chattel  mortgage  values  and  values 
of  other  mere  certificates  of  title  or  bare  legal 
powers,  is  a  false  census.  If  these  values  are 
included  for  some  useful  purpose  or  other, 
as  they  very  well  may  be,  they  should 
be  charged  off  when  it  comes  to  striking 
a  balance  to  show  the  value  of  the 
world's  wealth,  or  the  nation's  wealth,  or  the  city's 
or  the  township's  wealth,  or  the  aggregate  of 
wealth  by  whatever  term  you  describe  it.  That's 
what  I  want  you  to  understand.  You  do  under- 
stand it,  but  when  you  see  a  census  report  of 
values  you  Beem  to  stop  thinking  of  it.  If 
you  thought  for  a  moment  you  would  realize  how 
enormously  that  very  report  is  stuffed  with  mere 
title  and  obligation  values,  mere  bookkeeping  val- 
ues— values  that  disappear  as  soon  as  personal 


38  SOCIAL     SERVICE 

assets  and  liabilities  are  balanced  off  against  each 
other. 

The  confusions  we  have  been  speaking  of  are 
often  supplemented  with  another.  Money  and  the 
language  of  money  come  to  be  thought  of  as  iden- 
tical. But  in  fact  they  are  altogether  different 
things, — and  this  in  a  very  important  sense.  In 
comparing  our  knives,  for  instance,  which  we  were 
trading  even,  we  might  have  said,  in  the  language 
of  the  social  service  market,  that  they  were  each 
worth  three  dollars.  But  though  we  had  used  this 
money  vocabulary,  our  essential  idea  would  not 
have  been  a  money  idea  at  all.  It  would  have 
been  an  idea  of  the  relation  in  exchange  of  one 
knife  to  another.  The  money  terms  would  merely 
have  expressed  our  mutual  recognition  of  the  fact 
that  knives  like  those  two  were  equally  desirable 
and  equally  scarce. 

If  we  speak  of  old  Simon  D.  Sampson's  fortune, 
saying  that  he  is  worth  a  million  dollars,  our  es- 
sential idea  is  not  money.  We  know  that  he 
doesn't  possess  a  million  dollars  in  money.  What 
we  mean  is  that  in  a  measurement  of  all  his  prop- 
erty by  the  mode  of  measurement  in  use  in  the 
social  service  market — namely,  by  those  compari- 
sons of  relative  desirability  and  scarcity  which  we 
call  valuation — old  Sampson's  fortune  measures 
up  to  a  million  dollars.  A  million  dollars  of  what  ? 
Well,  according  to  his  inventory  of  assets  it  might 
be  a  million  dollars  of  houses,  of  building  lots,  of 
bonds  and  mortgages,  of  corporation  stocks,  of 
bank  balances,  of  actual  money,  and  what  yon  will 
besides;  but  in  the  last  analysis  it  would  be  a 
million  dollars'  worth  of  power  to  obtain  iocial 
service. 

We  must  remember,  then,  that  money  is  quite 
a  different  thing  from  the  terms  or  language  of 
money.  I  recall  in  this  connection  an  interesting 
and  rather  suggestive  observation  by  Lee  Meri- 


USE     OF     MONEY  39 

wether,  which  he  published  in  a  magazine  a  few 
years  ago.  Writing  of  his  travels  in  the  old 
Hudson  Bay  territory,  he  described  a  custom  there 
of  measuring  social  service  values  in  terms  of 
"skins."  As  we  would  estimate  a  commodity  as 
worth  so  many  "dollars,"  they  would  estimate 
one  as  worth  so  many  "skins."  Yet  the  word  was 
as  pure  an  abstraction  as  our  dollar  mark.  There 
was  no  particular  skin  which  the  term  identified, 
and  nobody  could  recall  that  there  ever  had  been 
one.  Nevertheless,  this  abstract  term  served  all 
the  purposes  of  value  measurements  in  that  re- 
mote department  of  the  social  service  market.  A 
deer  skin  was  worth  so  many  "skins,"  while  a 
muskrat  skin  was  worth  so  many  fractions  of  a 
"skin."  On  that  frontier,  then,  the  word  "skin," 
like  the  dollar  mark  with  us,  or  the  pound  mark 
in  Great  Britain,  served  as  a  common  denomina- 
tor for  expressing  the  relation  in  exchange  of 
deer  skins  to  muskrat  skins  or  any  other  skins,  of 
one  skin  of  any  kind  to  another  skin  of  the  same 
kind,  of  skins  to  groceries  and  weapons,  and  of 
everything  else  to  one  another. 

Meriwether's  story  may  sound  queerly  primitive, 
but  the  civilized  city  of  London  furnishes  an  ex- 
act parallel  at  its  very  financial  center.  Does  the 
British  "pound"  refer  to  a  pound  of  anything  in 
particular?  It  once  meant  a  pound  of  sterling 
silver,  as  the  Hudson  Bay  "skin"  may  once  have 
meant  a  particular  skin  long  since  forgotten.  But 
to-day  the  British  say  "pound"  as  the  trappers  say 
"skin"  and  as  we  say  "dollars;"  and  none  of  us 
refers  to  any  particular  object, — not  consciously, 
at  any  rate.  "Skins,"  £'s,  $'s — what  are  they  to 
any  of  us  but  z's  in  the  algebraic  equations 
of  social  service  ? 

Even  if  we  were  influenced  in  our  judgment  of 
the  value  of  the  dollar  by  the  act  of  Congress 
which  gives  the  name  of  "dollar"  to  a  certain  quan- 


40  SOCIAL    SERVICE 

tity  and  fineness  of  gold,  the  fact  would  still  re- 
main that  money  tokens,  whether  of  gold,  silver, 
copper,  nickel,  iron,  tin  or  paper,  are  absolutely 
different  from  money  terms.  That  this  difference 
may  be  exceedingly  important,  is  evident  from  a 
consideration  of  our  stupendous  banking  transac- 
tions. Scores  upon  scores  of  thousands  of  checks 
upon  banks  are  drawn  every  day,  and  every  day 
balances  are  settled  at  the  clearing  houses.  These 
transactions,  described  as  they  are  in  money  terms, 
mount  up  to  hundreds  of  millions  of  dollars  daily. 
Yet  but  little  actual  money  changes  hands.  If 
you  wish  to  be  surprised  at  the  magnitude  of  the 
transactions  and  the  small  percentage  of  actual 
money  paid,  take  a  glance  at  some  clearing  house 
report.  In  turning  the  leaves  of  Cannon's  history 
and  methods  of  "Clearing  Houses"  the  other  day, 
my  eye  fell  upon  two  tables  that  give  an  idea, 
though  they  are  old  now.  They  showed  the  aggre- 
gate of  clearings  through  the  New  York  clearing 
house  alone,  from  1854  to  1899 — the  book  was 
published  as  far  back  as  1900, — and  I  confess  I 
was  not  prepared  for  what  those  figures  indicated. 
The  highest  aggregate  of  clearings  in  any  year  was 
for  1899.  Of  course  it  is  much  larger  now.  But 
for  that  year  it  was  more  than  57,368  millions  of 
dollars — almost  200  millions  daily.  And  how 
much  of  all  that  enormous  sum — that  sum  that  ex- 
pressed only  a  part  of  the  interchanges  of  social 
service  in  only  one  part  of  only  one  country  in 
only  one  year — how  much  of  it  do  you  suppose 
was  represented  by  actual  money?  Only  a  little 
over  10  millions  a  day.  The  proportion  of  actual 
money  to  clearing  house  transactions  was  less 
than  5y2  per  cent.  So  we  may  see  that  the  multi- 
tudinous exchanges  of  social  service  in  this  great 
big  industrial  world  of  ours,  exchanges  aggregat- 
ing vast  values  in  the  language  of  money,  are 
effected  by  means  of  a  very  slight  use  of  actual 
money. 


USE    OF    MONEY  41 

For  the  most  part,  then,  social  service  obliga- 
tions, though  described  in  terms  of  money,  are 
redeemed,  not  in  actual  money  but  in  social  service. 
Yet  if  we  recur  to  what  we  have  previously  consid- 
ered, we  shall  remember  that  actual  money,  while 
essentially  different  from  money  terms,  is  only  one 
degree  removed  from  money  terms  with  reference 
to  the  redemption  of  social  service  obligations.  As 
these  obligations  are  for  the  most  part  redeemed 
in  social  service  and  not  in  money,  money  itself 
is  also  in  the  last  analysis  redeemed  in  social  serv- 
ice. For  money  is,  as  weihave  seen,  merely  a  token 
for  facilitating  exchanges  of  social  services. 

That  is  to  say,  such  is  the  nature  of  its  use.  Its 
abuse  we  have  postponed  the  consideration  of,  since 
that  belongs  to  the  pathology  of  the  subject  of 
which  we  are  now  considering  only  the  "health- 
ology."  The  point  I  am  here  trying  to  impress 
upon  you  is  that  a  clear  apprehension  of  money 
functions  is  the  first  requisite  for  a  solution  not 
only  of  money  problems  but  of  all  the  other  prob- 
lems of  social  service. 

But  is  there  really  a  possible  solution  even  of 
money  problems,  to  say  nothing  of  all  other  social- 
service  problems?  Does  not  everything  ceaseless- 
ly change,  so  that  we  no  sooner  think  we  have 
settled  a  problem  than  it  exhibits  new  aspects  and 
new  varieties  of  confusion?  And  do  I  think  ii 
possible  for  any  but  specialists  to  even  cope  with 
such  difficulties  ? 

Ceaseless  change!  Yes,  all  problems  do  under- 
go ceaseless  change.  And  it  is  true  that  only  ex- 
perts can  deal  with  the  particular  difficulties 
which  these  changes  present.  But,  Doctor,  are  you 
not  a  little  like  so  many  scientific  men,  whose  de- 
votion to  particulars  makes  them  blind  to  gen- 
erals? From  close  inspection  of  one  side  of  the 
shield  are  yon  not  ignoring  the  other  side?  If 
we  are  to  "see  life  and  see  it  whole,"  to  quote  one 


42  SOCIAL     SERVICE 

of  your  favorite  phrases,  we  must  look  at  its  whole- 
ness as  well  as  at  its  detail,  at  its  generals  as  well 
as  at  its  particulars.  There  is  indeed  ceaseless 
change.  All  things  change.  But  then  there  is 
also  rigid  stability.  All  change  is  in  obedience  to 
invariable  law.  Though  details  change  ceaselessly, 
fundamental  principles  are  "from  everlasting  unto 
everlasting" — "the  same  yesterday,  to-day  and 
forever." 

You  pin  your  faith  to  evolution.  But  you  never 
think  of  the  changes  of  evolution  as  occurring 
without  a  persistent  impelling  force,  a  stable  evo- 
lutionary principle.  If  you  did,  you  couldn't  pin 
your  faith  to  it.  Don't  you  know — of  course  you 
do — that  the  details  of  evolution  are  but  mutable 
manifestations  of  immutable  law?  Should  prin- 
ciple ever  seem  to  have  changed,  it  is  not  principle 
itself,  but  human  apprehensions  of  it  that  have 
changed.  The  principle  is  always  the  same.  Grav- 
itation was  no  different  before  it  sent  a  message 
to  Newton  in  a  falling  apple  than  it  was  after  he 
revealed  the  message,  nor  electricity  before  Frank- 
lin played  with  it  than  after  nineteenth  century 
inventors  had  harnessed  it.  And  didn't  the  earth 
turn  on  its  axis  every  day  just  the  same  when 
folks  thought  the  sun  rolled  around  it,  as  after 
they  learned  that  it  doesn't? 

Apply  these  observations  to  the  science  of  social 
service,  and  you  will  see  that  while  mastery  of 
the  innumerable  and  ever  changing  details  of  so- 
cial service  is  out  of  the  power  even  of  experts,  the 
stable  principles  are  so  few,  so  obvious,  so  easily 
understood,  that  any  sane  mind  can  grasp  them. 
You  will  remember  my  admonishing  you  at  our 
dinner  in  Joseph's  restaurant,  that  the  particulars 
of  social  service  are  incomprehensibly  numerous 
and  intricate.  No  man  can  master  every  sort  of 
service.  Building  must  be  left  to  builders,  farm- 
ing to  farmers,  "lawing"  to  lawyers,  "doctoring" 


USB    OF    MONEY  43 

to  doctors,  financiering  to  financiers,  and  so 
through  the  endlessly  intricate  labyrinth.  But  it 
requires  no  expert  to  understand  that  all  this  de- 
tail with  its  ceaseless  variations,  lias  for  its  impulse 
the  human  desire  for  comfort,  and  for  its  natural 
end  and  object  the  continuous  and  universal  satis- 
faction of  that  desire.  Here,  then,  is  a  simple 
yet  tremendously  important  generalization.  Other 
generalizations  equally  obvious  and  equally  im- 
portant, I  should  like  to  talk  about  after  awhile ; 
but  the  truth  I  wish  you  to  realize  just  now  is 
the  stability  of  essential  facts,  no  matter  how 
variable  their  particular  manifestations  may  be. 
The  essential  facts  or  general  principles  of  social 
service  must  have  been  true  since  man  became 
a  trading  animal ;  they  must  continue  to  be  true 
while  man  remains  a  trading  animal. 

So  the  essential  principles  of  money  must  have 
been  the  same  ever  since  anything  that  can  be 
called  money  came  into  use,  and  must  continue 
unchanged  so  long  as  anything  that  can  be  called 
money  remains  in  use.  Since  the  details  vary, 
expert  financiers  must  work  for  us  in  the  minutiae 
of  financiering.  That  is  their  function  in  the 
specialized  intricacies  of  social  service.  But  the 
essential  principles  of  money  may  easily  become 
as  clear  to  our  vision  as  to  theirs — possibly  clearer, 
for  we  are  not  distracted  as  they  may  be  with  re- 
sponsibility for  observing  the  confusing  and 
changing  details. 

If  the  essential  principles  of  money,  those  great 
generalizations  which  remain  stable  through  all 
the  mutations  of  the  infinite  details  of  financier- 
ing— if  these  take  lodgment  in  our  habits  of 
thought,  we  shall  be  alert  to  know  whether  our 
experts  are  working  for  us  loyally  or  not.  Though 
ignorant  of  details  we  shall  be  alive  to  tendencies. 

You  and  I  do  not  know,  for  instance,  how  to 
make  an  automobile.  We  are  not  expert  in  the  facts, 


44  SOCIAL    SERVICE 

nor  in  the  possibility  of  improvement  in  automo- 
biles. We  cannot  even  manage  an  automobile.  We 
leave  all  those  complex  details  to  experts.  But 
we  do  apprehend  the  general  and  unchanging  prin- 
ciples of  wheel  locomotion,  and  so  are  capable  of 
knowing  whether  an  automobile  is  going  or  not, 
or  is  going  forward  or  backward,  or  is  standing 
still,  or  is  toppling  over  into  a  ditch.  No 
folly  by  experts  regarding  the  large  facts  and 
general  principles  of  automobile  locomotion  can 
deceive  our  common  sense,  however  incapable  we 
may  be  as  to  particular  devices.  Or,  to  take  a  leaf 
from  our  own  personal  experience,  yours  and 
mine.  When  I  invaded  the  carpenter's  specialty 
one  day  and  mashed  my  thumb  with  a  hatchet 
while  trying  to  drive  a  nail,  I  had  to  go  to  you 
for  anatomical  repairs.  I  wasn't  specialist  enough 
in  anatomy  to  reconstruct  my  own  thumb.  But 
I  didn't  need  you  nor  any  other  specialist  to  tell 
me  that  the  thumb  hurt,  that  it  needed  repairs, 
and  that  it  was  a  blow  with  the  head  of  a  hatchet 
that  had  done  the  damage.  I  knew  those  facts 
as  well  as  you  could,  and  better  in  this  case  than 
you  did.  The  general  subject  was  in  my  province ; 
the  specialized  details  were  in  yours.  In  further 
illustration  I  might  remind  you  of  something  still 
more  profound  in  your  own  specialty.  You  know 
immensely  more,  Doctor,  about  breathing  organs 
in  the  animal  kingdom  than  I  do.  I  am  no  physi- 
ological expert  and  you  are.  You  know  about 
the  lungs  in  man,  and  the  gills  in  fishes,  and  you 
may  possibly  have  studied  the  subject  so  minutely 
as  to  be  able  to  distinguish  animals  with  no  appa- 
rent breathing  apparatus  at  all.  So  much  for  par- 
ticulars. But  when  it  comes  to  generals,  I  know  as 
well  as  you  do  that  in  some  way  and  somehow, 
whether  by  one  kind  of  apparatus  or  another, 
every  living  thing  breathes. 

Something  similar  can  be  said  of  the  difference 


USE     OF     MONEY  45 

between  an  ordinary  sane  man  and  an  expert  finan- 
cier with  reference  to  money.  Although  you  and 
I  know  nothing  of  financiering  as  a  business,  but 
must  leave  that  to  experts,  we  can  apprehend  and 
appreciate  the  larger  facts,  those  elemental  laws, 
those  essential  principles  which  unchangingly  gov- 
ern the  use  of  money  in  social  service. 

We  know  that  money  is  a  means  to  an  end — the 
end,  namely,  of  promoting  and  distributing  social 
service. 

We  know  that  its  function  is  to  serve  as  a  token 
or  intermediary  for  exchanging  social  service. 

We  know  that  it  performs  this  function  when  it 
is  current  in  the  social  service  market, — that  while 
such  anterior  considerations  as  origin  or  material 
may  make  it  current,  its  currency  is  its  distinctive 
quality. 

We  know  that  money  and  the  language  or  terms 
of  money  are  entirely  different  things,  money  be- 
ing a  current  token  for  the  interchange  of  social 
services,  and  the  language  or  terms  of  money  being 
verbal  expressions  for  the  same  purpose  but  as 
well  without  as  with  the  use  of  tokens. 

We  know  that  interchanges  of  social  service  by 
means  of  money  or  its  terms  are  made  on  the 
basis  of  value. 

We  know  that  value  is  not  a  thing  by  itself,  but 
is  a  mere  attribute  of  marketable  things ;  and  that 
it  is  regulated  by  their  degrees  of  desirability  rel- 
atively to  their  degrees  of  scarcity  in  comparison 
with  one  another. 

We  know,  therefore,  that  money  is  a  device  for 
acquiring  from  our  fellow  servitors  in  the  social 
service  market,  in  fair  exchange  for  our  own  serv- 
ices, the  things  that  we  desire  for  our  comfort. 

Consequently,  we  also  know  that  the  use  of 
money  is  the  primary  consideration  in  any  in- 
quiry into  the  science  of  social  service. 


CHAPTER  III. 
The  Abuse  of  Money  in  Social  Service. 

When  I  spoke  of  the  use  of  money  in  social  serv- 
ice, Doctor,  I  ventured  to  call  that  branch  of  the 
subject  its  "healthology,"  in  contradistinction  to  its 
pathology,  which  I  should  like  to  talk  about  now, 
if  you  don't  mind. 

You  musn't  blame  me  for  inventing  a  barbaric 
word  for  the  antithesis  of  "pathology."  A  more 
scientific  one  I  could  not  think  of,  and  the  the- 
saurus doesn't  help  me  out.  We  have  no  word,  have 
we,  which  denotes  the  science  of  health  as  com- 
prehensively as  "pathology"  denotes  the  science  of 
disease?  How  significant  this  is  of  the  channels 
in  which  the  scientific  mind  has  run  in  human  his- 
tory— how  suggestive  of  a  tendency  to  prefer  the 
study  of  disease  to  the  study  of  health.  That  is  an 
indictment,  Doctor,  to  which  your  profession 
would  have  to  plead — "guilty,"  I  was  about  to 
say, — but  we  may  mercifully  let  it  off  with  a  "nolo 
contendere."  You  needn't  blush.  All  of  us  might 
be  grateful  to  get  off  as  easily.  I  will  confess  to 
you  in  confidence  that  even  the  law  is  a  hotch- 
potch of  pathological  instances  instead  of  a  science 
of  righteous  principles.  And  isn't  this  true  of  all 
the  sciences  that  we  may  distinguish  as  sciences 
of  tendencies?  They  seem  to  be  tangled  up 
in  the  puzzling  coils  of  empiricism.  And 
of  none  is  this  more  strictly  true  than  of  the 
science  of  social  service.  While  your  profession, 
in  spite  of  its  entanglements  in  empiricism  in  the 
past,  has  begun  to  get  glimmerings  of  the  bene- 


ABUSE    OF     MONEY  47 

ficent  principle  that  in  the  long  run  it  is  good 
health  that  is  "catching"  rather  than  disease,  the 
science  of  social  service  is  still  groping  in  patho- 
logical mazes.  This  is  where  that  "root  of  all 
evil"  quotation  comes  in  with  reference  to  money 
— on  the  pathological  side  of  the  subject. 

We  were  ready  to  agree,  were  we  not?  that  the 
love  of  money — not  money  itself,  but  the  love  of 
it — is  the  root  of  all  evil,  and  that  this  is  be- 
cause the  love  of  money  is  equivalent  to  love  of 
dominion  over  our  fellow  men.  Then  what  do  you 
say  to  a  little  elaboration  of  that  thought  ? 

Love  of  dominion  expresses  itself  socially,  in  its 
crudest  form,  as  chattel  slavery.  You  remember 
the  great  preacher — Wilberforce,  wasn't  it?  or  was 
it  Wesley? — who  denounced  slavery  as  "the  sum 
of  all  villainies."  Whoever  he  was,  nobody  ever 
spoke  a  truer  word.  It  is  only  less  subtle,  not  less 
true,  than  that  the  love  of  money  is  the  root  of 
all  evil ;  and  if  we  would  know  why  this  is  true  of 
love  of  money,  we  may  find  out  by  asking  our- 
selves why  slavery  is  the  sum  of  all  villainies.  The 
answer  is  that  slavery  involves  an  assumption  of 
the  right,  and  implies  possession  of  the  power,  to 
commit  every  kind  of  crime  that  man  can  commit 
against  his  brother  man.  Doesn't  it  comprehend 
the  power,  the  assumption  of  the  right,  and  habit- 
ually the  act  itself,  of  appropriating  the  slave's 
earnings — which  is  theft  ?  Doesn't  it  comprehend 
the  power,  the  assumption  of  the  right,  and  some- 
times the  act  itself  of  forcing  the  slave's  body — 
which  is  rape  ?  Doesn't  it  comprehend  the  power, 
the  assumption  of  the  right,  and  sometimes  the 
act  itself,  of  taking  the  slave's  life — which  is 
murder?  If  there  are  any  other  villainies  worth 
mentioning,  you  will  find  upon  considering  them 
that  slavery  comprehends  the  power,  the  assump- 
tion of  the  right,  and  the  act  itself  (occasionally 
if  not  habitually)  of  committing,  them  all. 


48  SOCIAL     SERVICE 

Wouldn't  you  agree,  then,  that  love  of  slavery  is 
the  root  of  all  villainies  ?  You  can't  deny  it  with- 
out denying  that  the  slave  is  a  fellow  man.  For 
what  does  love  of  slavery  imply  but  a  ruling  de- 
§ire  to  commit  the  villainies — one  or  some,  some 
or  all — that  slavery  permits  ?  and  what  is  a  ruling 
desire  to  commit  villainies  if  it  is  not  the  root  of 
villainies?  Well,  love  of  money  is  essentially  the 
ame  thing  as  love  of  chattel  slavery. 

It  is  love  of  slavery  in  refined  and  subtle 
forms — in  forms  in  which  you  will  find,  despite 
their  superficial  refinement,  every  villainy  that 
lurkg  in  chattel  slavery.  There  is  the  same  love 
of  appropriating  the  earnings  of  others.  We  call 
it  by  milder  names,  because  it  takes  the  form  of 
free  contract ;  but  you  and  I  know  that  most  labor 
contracts  are  not  free  except  in  form.  The  free- 
dom of  the  ordinary  worker  in  selling  his  services 
for  wages  is  something  like  that  of  the  boarding- 
house  resident  of  whom  the  comic  papers  used  to 
tell.  He  asked  the  waiter  what  they  had  for 
breakfast  and  got  this  brisk  reply :  "Salt  pork  and 
shad — shad's  all  gone — which'll  you  have?"  To 
love  money  is  to  wish  to  be  able  to  compel  social 
servitors  to  give  more  service  than  they  get.  And 
isn't  this  the  essence  of  stealing  as  truly  when 
it  is  masked  in  a  pretense  of  free  contract,  as  when 
it  candidly  takes  the  form  of  chattel  slavery  ?  But 
stealing  is  not  the  only  villainy  which,  compre- 
hended in  slavery,  is  also  an  evil  of  which  love 
of  money  is  the  root.  There  is  likewise  rape.  So- 
ciety knows  of  it  in  the  love-of-money  guise  as 
prostitution,  and  places  the  blame  upon  the  vic- 
tims ;  but  you  and  I  know  that  prostitution  is  far 
less  a  result  of  feminine  unchastity  than  of  eco- 
nomic coercion.  And  we  are  beginning  to  see, 
are  we  not?  that  love  of  money  is  the  root,  not 
only  of  stealing  and  of  rape  but  also  of  murder. 
Society  may  not  be  able  to  accuse  anybody  as  one 


ABUSE    OF    MONEY  49 

of  the  murderers,  but  there  is  murder  neverthe- 
less. You  don't  suppose,  do  you,  that  men  and 
women  and  children  throw  away  their  lives  in 
deadly  vocations  and  disease-breeding  homes,  for 
their  health? — women,  mind  you!  and  little  chil- 
dren! Mrs.  Browning's  pathetic  "Cry  of  the  Chil- 
dren" would  bear  this  year's  date  as  well  as  that 
in  which  it  was  written,  and  it  was  no  fable  when 
she  wrote  it.  Is  it  a  voluntary  sacrifice,  then,  this 
waste  of  lives — a  voluntary  sacrifice  for  the  com- 
mon good  ?  Wouldn't  that  be  excessive  devotion  by 
the  poor?  It  is  only  the  poor,  you  understand, 
that  sacrifice  themselves  in  this  wholesale  way,  re- 
gardless of  age  or  sex,  to  the  insatiate  demands  for 
unrequited  social  service.  Then  why  the  sacri- 
fice? Ah,  Doctor,  you  and  I  know,  for  we  have 
seen  somewhat  of  the  ups  and  downs  of  life,  that 
the  abnormal  mortality  of  what  we  call  "the 
working  classes" — those  whom  we  unconsciously 
compliment  with  the  implication  that  they  alone 
eat  their  bread,  such  as  it  is  and  what  there  is  of 
it,  in  the  sweat  of  their  own  faces — we  know  that 
the  excessive  mortality  of  that  class  results  from 
economic  coercion.  Through  pretenses  of  free  con- 
tract, expressed  in  the  language  of  money,  they 
are  coerced  even  unto  death,  as  truly  as  if  they 
were  chattel  slaves  cringing  under  the  murderous 
lash  of  an  overseer.  The  lash  of  an  overseer! 
What  is  that,  to  hunger  and  cold?  or  fear  of  it, 
to  fear  of  hunger  and  cold  ? 

You  can  speak  the  keenest  word, 
You  are  sure  of  being  heard, 
From  the  point  you're  never  stirred. 
Hunger  and  Cold! 

Cheeks  are  pale,  but  hands  are  red, 
Guiltless  blood  may  chance  be  shed, 
But  ye  must  and  will  be  fed, 
Hunger  and  Cold! 

The  "hideous  lusts"  of  Hunger  and  Cold  which 


50  SOCIAL     SERVICE 

Lowell's  democratic  stanzas  describe,  are  the 
coercive  force  of  our  time.  They  supply  vitality 
to  the  villainies  of  slavery  in  social  conditions 
where  a  crude  chattel  slavery  has  given  place  to 
subtler  forms.  Under  false  pretenses  of  freedom  of 
contract,  disguised  in  the  legitimate  language  of 
money,  slavery  still  holds  sway.  We  cannot  make 
individual  beneficiaries  of  this  slavery  responsible 
as  thieves  or  ravishers  or  murderers ;  for  those  of- 
fenses of  our  finer  forms  of  slavery  spring  from 
subtle  social  maladjustments  rather  than  individ- 
ual aggressions.  But  don't  let  us  fool  ourselves, 
Doctor.  The  offenses  themselves  exist — stealing, 
rape,  murder, — and  have  their  roots  in  that  love 
of  money  which,  analyzing  into  love  of  slavery, 
into  love  of  dominion,  into  love  of  getting  service 
without  giving  service,  is  the  root  of  all  evil. 

How  often  do  we  hear  our  friends  say,  "I  wish 
I  had  plenty  of  money."  Perhaps  we  catch  our- 
selves saying  it  sometimes — thinking  it  at  any 
rate.  But  why  do  we  wish  for  plenty  of  money? 
Oh,  to  do  good  to  others  with,  of  course,  and  only 
incidentally  to  have  an  easy  time  ourselves!  Is  it 
earned  money  that  we  wish  for?  Do  we  wish  to 
render  service  for  it?  Not  on  your  life!  if  you  will 
permit  me  the  slang.  What  we  wish  is  to  escape 
the  necessity  of  rendering  service.  It  is  not  earned 
money,  but  "easy  money"  that  we  wish  for. 

Having  money,  we  should  have  evidence 
of  title  to  social  service.  But  not  hav- 
ing given  service  of  our  own  for  that 
evidence  of  title,  somebody  would  have  to 
lose  the  equivalent  of  any  service  that  it  bought 
for  us.  The  person  of  whom  we  bought  might  not 
lose,  or  might  not  lose  much ;  and  if  we  could  fol- 
low the  economic  history  of  all  our  purchases  with 
that  unearned  money,  to  the  very  last  item  in  the 
farthest  recesses  of  raw-material  production,  we 
niight  not  discover  that  any  particular  servitor 


ABUSE     OF     MONET  II 

had  lost  much  through  our  lucky  fortune.  But  in 
the  great  round-up  of  social  services,  every  dol- 
lar's worth  of  service  we  bought  with  our  "easy 
money"  would  be  taken  from  somebody  without 
compensation.  As  sure  as  arithmetic  is  arithmetic, 
this  would  be  so.  In  the  exchanges  of  social  serv- 
ice by  means  of  money  there  must  be  loss  of  serv- 
ice somewhere,  if  anyone  gets  the  service  of  others 
with  money  for  which  he  has  not  rendered  corre- 
sponding service  of  his  own.  The  loss  might  be 
spread  out  thin,  like  an  insurance  loss,  but  loss 
there  would  be. 

Mind  you,  I  am  not  saying  whether  getting 
without  giving  service  is  reprehensible.  That  de- 
pends. You  gave  service  to  me  without  getting 
service  from  me  when  you  paid  for  my  dinner  at 
Joseph's;  but  this  was  hospitality.  Your  father 
gave  service  to  you  without  getting  service  from 
you  when  he  sent  you  to  college ;  but  that  was  an 
expression  of  paternal  love  and  duty.  Sampson 
paid  you  fifty  dollars  for  his  hired  man's  negli- 
gence in  hurting  your  horse;  but  that 
was  compensation  for  an  injury.  The  boot- 
black who  gave  to  a  beggar  the  nickel  you  paid 
him  for  a  "polish"  this  morning,  gave  a  title  to 
service  without  getting  any  service  or  title  in  re- 
turn ;  but  he  did  it  voluntarily,  out  of  the  depths 
of  his  generosity  and  the  shallows  of  his  pocket 
book.  If  the  beggar  had  forced  the  nickel  from 
him,  or  the  bootblack  had  dropped  it  and  the  beg- 
gar had  furtively  appropriated  it,  there  would 
have  been  a  different  moral  problem.  But  the  so- 
cial service  fact  in  all  those  instances  would  be  the 
same, — that  somebody  had  given  service  without 
getting  service  in  return.  So  would  it  be  with  our 
fellows  in  this  world  of  social  service  were  our 
wishes  to  come  true.  The  social-service  fact  would 
be  the  same,  however  different  the  moral  problem, 
if  some  potent  fairy  in  the  form  of  a  special  priv- 


52  SOCIAL    SERVICE 

ilege  under  the  law  (the  only  form  in  which  these 
fairies  ever  come)  were  to  grant  our  wishes  for 
"easy  money."  We  should  get  service  without 
giving  service. 

Most  of  us  have  to  take  these  wishes  out  in 
wishing,  though  others  are  luckier.  You,  for  in- 
stance, are  luckier  to  the  extent  that  you  get  roy- 
alties for  allowing  those  Pennsylvania  miners  to 
dig  for  coal  in  what  the  law  calls  "your"  natural 
coal  deposit.  But  we  are  all  virtuous  enough  when 
we  indulge  our  amiable  wishes  for  "easy  money." 
Don't  we  vigorously  vow  a  beneficent  expenditure 
of  most  of  it  ?  Aye,  indeed!  we  promise  large  sums 
to  make  the  poor  comfortable!  But  didn't  it  ever 
occur  to  you  that  this  is  uneconomical  of  energy  ? 
Why  not  wish  for  large  sums  for  the  poor  directly, 
so  that  they  may  make  themselves  comfortable? 
Zangwill  illustrates  the  generous  disposition  of 
"easy-money"  wishers  with  his  story  of  a  pious 
man  of  dubious  reputation,  whose  wishes  for 
money  took  the  form  of  prayer.  "0  Lord,"  he 
prayed,  "give  me  a  hundred  thousand  dollars  and 
I  will  distribute  fifty  thousand  among  the  poor." 
Then  he  paused,  recollecting  his  doubtful  reputa- 
tion, and  after  reflection  he  added :  "And,  0  Lord, 
if  you  can't  trust  me,  give  me  only  fifty  thousand 
dollars  and  distribute  the  other  fifty  thousand 
among  the  poor  yourself."  The  story  points  to 
that  love  of  money  which  is  the  root  of  all  evil.  It 
is  love  of  unearned  money,  love  of  titles  to  service 
for  which  no  corresponding  service  has  been  ren- 
dered, love  of  getting  service  without  giving  serv- 
ice, love  of  something  for  nothing.  This  is  what 
constitutes  love  of  the  abuse  of  money  in  the  sense 
in  which  I  am  discussing  its  abuse. 

For  what  we  are  trying  to  consider,  let  me 
warn  you,  is  not  the  abuse  which  an  individual 
possessing  money  may  subject  its  expenditure  to; 
but  that  abuse  of  the  normal  functions  of  money, 


ABUSE     OF     MONEY  53 

as  a  medium  of  exchanging  social  services,  to 
which,  it  may  be  automatically  subjected  by  patho- 
logical social  conditions.  Our  question,  therefore, 
is  not  whether  services  exchanged  by  means  of 
money  or  in  terms  of  money,  are  of  a  kind  to  merit 
the  approval  of  virtuous  people,  but  whether  or 
not  its  function  of  effecting  exchanges  fairly  is  out 
of  joint.  The  mechanism  of  trade,  and  not  th« 
personal  morality  of  traders,  is  the  object  of  our 
inquiry.  Very  likely  we  may  use  or  abuse  money 
by  our  modes  of  expenditure.  Old  Simon  D. 
Sampson,  for  instance,  might  be  said  to  have 
used  money  when  he  contributed  to  the  building 
fund  of  our  little  church,  and  to  abuse  it  when 
he  buys  his  morning  cocktail.  But  these  uses  and 
abuses  of  money  are  personal  to  him.  They  don't 
affect  any  right  of  yours  or  mine  to  get  service  for 
the  service  we  give.  By  contributing  money  to  the 
church  fund,  he  directed  to  church-building,  so- 
cial services  that  he  might  have  directed  to  the 
making  of  cocktails,  which  we  may  agree  was  a 
good  thing  for  him  to  decide  to  do;  by  buying 
cocktails,  he  directs  to  the  liquor  trade  social  serv- 
ices that  he  might  direct  to  church-building,  which 
we  may  agree  is  a  bad  thing  for  him  to  decide  to 
do.  But  so  far  as  the  exchanges  of  social  service 
are  concerned,  neither  of  these  things  is  either 
good  or  bad, — neither  is  a  use  or  an  abuse  of 
money  in  the  social  service  sense.  Although  his 
love  of  money  for  church-building  purposes  may 
have  much  to  do  with  his  personal  character,  with 
his  individual  vices  or  virtues,  it  has  nothing  to 
do  with  the  fairness  of  his  power  over  the  labor 
of  his  fellow  men.  Although  it  may  have  much 
to  do  with  his  use  or  abuse  of  money  in  his  choice 
of  personal  expenditures,  it  has  nothing  to  do 
with  the  social  use  or  abuse  that  the  money  serves 
in  effecting  exchanges  of  social  service  fairly  or 
unfairly. 


54  SOCIAL     SERVICE 

Don't  you  recall  my  saying  that  the  use  of 
money  facilitates  exchanges  of  social  service 
fairly?  That  was  when  we  were  considering  the 
"healthology"  of  the  subject.  Consider,  then,  that 
its  abuse  is  the  facilitation  of  exchanges  of  social 
service  unfairly,  and  you  have  the  pathology  of 
the  subject.  Were  you  to  ask  me  to  distinguish 
between  money  in  course  of  use,  and  money  in 
course  of  abuse,  I  should  say  that  money  got  in 
free  exchange  for  services  rendered  by  others,  is  to 
that  extent,  money  in  course  of  use;  whereaa 
money  got  without  rendering  service  for  it,  unless 
a  voluntary  gift  or  compensation  for  some  loss, 
is  to  that  extent  money  in  course  of  abuse.  And  I 
don't  think  that  it  makes  any  moral  difference 
whether  money  got  without  service,  and  not  as  a 
gift  or  compensation  for  loss,  is  got  against  the 
law  or  by  means  of  the  law. 

You  needn't  frame  the  question  that  is  on  your 
lips.  Pardon  my  interrupting,  but  I  know  what  you 
want  to  ask.  It's  about  the  gold  standard  and 
silver  coinage,  isn't  it  ?  Well,  that  is  an  aspect  of 
the  subject  which,  like  every  other  special  question 
regarding  money,  comes  under  the  head  of  its 
pathology  or  its  "healthology,"  its  use  or  its  abuse, 
according  to  the  special  circumstances. 

At  the  outset  it  raises  the  curious  question  of 
"intrinsic  value."  Value  cannot  be  "intrinsic," 
say  some.  They  are  right,  of  course,  if  they 
mean  to  deny  that  the  value  of  an  object  is  like 
its  weight  or  length  or  breadth  or  thickness  or 
sweetness  or  bitterness — a  quality  inherent  in  the 
object  itself  irrespective  of  every  other  object.  Oh, 
yes,  it  may  be  true,  if  you  wish  to  cut  the  thing  so 
fine,  that  no  object  has  any  quality  whatever  ir- 
respective of  the  sensations  of  another  object — 
no  value  without  a  valuer,  no  taste  without  a 
taster,  no  smell  without  a  smeller,  and  so  on. 
But  that  is  not  the  point.  The  taster  or  smeller 


ABUSE     OF     MONEY  55 

is  conscious  of  taste  or  smell,  isn't  he,  regardless 
of  comparison  with  any  other  object?  But  the 
valuer  is  not  conscious  of  value,  is  he,  without 
Buch  a  comparison  ?  There  you  have  the  real  point. 
Value  alludes  to  a  certain  comparison  of  objects 
with  one  another.  So  I  agree  with  those  money- 
question  disputants  who  say  that  there  is  no  such 
thing  as  "intrinsic"  value,  provided  they  mean  to 
deny  that  value  attaches  to  any  object  irrespective 
of  a  comparison  with  other  objects. 

But  I  suspect  that  with  this  interpretation 
everybody  else  agrees  with  them.  There  is  no 
controversy  over  the  importance  of  "intrin- 
sic" value  money  in  the  strict  sense  of  the  word 
"intrinsic."  This  controversy,  like  so  many  oth- 
ers in  connection  with  social  service,  lives,  moves 
and  has  its  being  in  a  confused  meaning  of 
words.  Those  who  argue  for  or  against  money 
of  "intrinsic"  value  are  not  thinking  of  value  as 
an  inseparable  quality,  such  as  qualities  that  affect 
our  senses  directly.  Like  all  the  rest  of  us,  they 
are  thinking  of  "value"  as  a  term  of  comparison. 
But  they  take  the  comparison  for  granted,  as 
something  which  everybody  understands,  some- 
what as  judges,  dispensing  with  sworn  proof,  take 
judicial  notice  of  the  facts  of  common  knowl- 
edge. The  relative  desirability  and  scarcity  of 
objects  being  commonly  distinguished  in  terms 
of  value,  as  a  result  of  habitual  comparisons  in 
the  social  service  market,  they  see  no  impropriety 
or  ambiguity,  and  neither  do  I,  in  using  the  word 
"intrinsic"  to  distinguish  from  the  currency  value 
of  money  tokens,  the  value  of  their  material. 
We  know,  for  instance,  that  a  fifty-dollar  green- 
back passes  current  for  fifty  times  as  much  as  a 
one-dollar  gold-piece,  although  the  material  of 
the  gold  piece  is  worth  probably  500  times  as  much 
as  the  material  of  the  fifty-dollar  greenback. 
Why  is  it  not  entirely  proper,  then,  if  we  have  oc- 


56  SOCIAL     SERVICE 

ccsion  to  talk  about  this  difference,  to  say  for 
short  that  the  gold  piece  is  money  of  "intrinsic 
value"  and  the  greenback  is  not?  We  are  not 
deciding  the  question  of  why  the  one  is  so  much 
more  valuable  than  the  other  as  a  money  token 
while  its  material  is  so  much  less  valuable  as  a 
commodity ;  we  are  only  recognizing  the  fact,  and 
fact  it  certainly  is. 

At  any  rate  that  is  what  the  advocates  of  "in- 
trinsic value  money"  do.  They  use  the  word  "in- 
trinsic" to  distinguish  money  tokens  made  of 
material  having  a  value  corresponding  approxi- 
mately to  their  denominational  value,  from  money 
tokens  made  of  material  of  comparatively  little  or 
no  value,  or  of  value  which  does  not  correspond  to 
the  denominations.  A  better  word  than  "intrin- 
sic" might  be  found,  but  this  word  need  not  con- 
fuse. We  can  say,  without  ambiguity,  that  gold 
money,  silver  money,  and  nickel  money,  have  dif- 
ferent appreciable  degrees  of  "intrinsic"  value, 
and  that  paper  money  has  hardly  any. 

In  the  gold  and  silver  controversy  both  the 
gold  metalists  and  the  bi-metalists  advocate 
money  of  full  "intrinsic  value."  But  the  gold 
metalists  contend  that  silver  money  is  "unsound," 
because  its  coins  are  of  much  less  "intrinsic  value" 
than  their  currency  stamp  or  denomination. 
The  bi-metalists  attribute  this  difference  to  the 
fcee  coinage  of  gold  by  government  and  the  re- 
fusal of  government  to  coin  silver  freely  at  the 
old  ratio  of  16  of  silver  to  1  of  gold.  By 
this  discrimination  in  favor  of  gold,  so  the  bi- 
metalist  argument  runs,  gold  is  given  a  large 
market  which  is  denied  to  silver — a  market  for 
use  for  money  tokens — and  it  consequently  rises 
in  value  relatively  to  silver.  You  see  the  point, 
don't  you?  The  desirability  of  silver  being  by 
this  discrimination  diminished  relatively  to  its 
eearcity,  it  becomes  less  valuable ;  but  offer  it  free 


ABUSE     OF     MONEY  57 

coinage,  and  its  desirability  (its  scarcity  remain- 
ing the  same)  would  so  increase  as  to  restore  the 
old  equilibrium. 

This  argument  for  the  free  coinage  of  silver 
and  gold  at  16  to  1,  turns  upon  what  yoii  have 
often  heard  of  as  the  "quantity  theory"  of  money, 
a  theory  which  prominent  gold  mono-metalistshave 
pretty  vigorously  disputed.  They  insist  that  the 
free  coinage  of  silver  and  gold  would  not,  and 
the  free  coinage  of  gold  alone  does  not,  affect 
their  relative  values.  The  desirability  of  a  metal 
relatively  to  its  scarcity,  is  not  in  their  view 
enhanced  much  if  any  by  coinage. 

This  argument  is  related,  of  course,  to  rap- 
idity of  circulation.  A  larger  volume  of  busi- 
ness can  be  done  with  a  given  quantity  of  money 
if  the  money  circulates  rapidly  than  if  it  circu- 
lates slowly.  That  is  plain  enough.  If  100  one- 
dollar  purchases  are  made  in  a  town  in  a  given 
time  with  only  one  1-dollar  bill,  that  town  doesn't 
need  as  large  a  volume  of  dollars,  all  other 
things  being  the  same  you  know,  as  it  would 
if  it  took  two  1-dollar  bills  to  make  100 
purchases  in  the  same  time.  The  use  of  checks 
instead  of  money  tokens  has  the  same  effect  in 
this  respect  as  rapidity  of  circulation.  That  also 
is  plain,  as  you  will  realize  if  you  recall  what  I 
said  about  banks  and  clearing  houses.  Conse- 
quently, the  quicker  the  circulation  of  money  tok- 
ens, or,  what  is  the  same  thing,  the  more  general 
the  use  of  checks  on  banks,  the  less  is  the  demand 
upon  money  material  relatively  to  the  amount  of 
business  done,  and  therefore  the  less  the  effect  of 
coinage  upon  the  value  of  coin  metals. 

But  I  don't  intend  to  discuss  the  merits  of  this 
question.  To  do  so  would  take  me  far  afield  into 
the  mazes  of  gold  and  silver  production,  prices, 
and  all  that  sort  of  thing — important  enough  to 
the  experts,  but  not  important  in  the  more  gen- 


68  SOCIAL    SERVICE 

eral  relations  of  social  service.  It  is  not  minute 
variations,  but  the  general  order  of  things,  that 
you  and  I  need  to  grasp.  I  have  touched  upon 
gold  and  silver  coinage  at  all  only  to  get  at  the 
general  character  of  the  controversy  as  a  neces- 
sary preliminary  to  considering  the  bearing,  one 
way  or  the  other,  of  coinage  upon  the  question  of 
the  use  or  abuse  of  money  in  social  service. 

Let  me  digress  again,  however,  to  say  that  the 
znono-metalists  and  the  bi-metalists  are  not  the 
only  money  philosophers.  Against  both  sides  to 
that  controversy  are  the  Greenbackers,  whose 
ideas  have  survived  their  political  activity,  and 
who  deny  the  utility  and  assert  the  wastefulness 
of  using  valuable  material  for  money  tokens. 
And  between  the  Greenbackers  and  the  "intrinsic 
value"  advocates  there  is  a  group  which  stands 
for  a  standard  unit  of  value  measurement  con- 
sisting of  a  definite  quantity  and  quality  of  a 
particular  metal  of  "intrinsic  value,"  but  which 
would  use  non-valuable  material  for  currency. 
Premising  that  so  many  grains  of  gold  so  fine 
should  be  the  standard  dollar,  these  money  theor- 
ists would  coin  no  dollars  of  gold  and  issue  none 
of  paper  or  anything  else,  but  would  leave  private 
parties  to  issue  their  own  money  tokens  or  cur- 
rency with  reference  to  the  prescribed  standard 
dollar  as  the  unit  of  value. 

However  intricate  these  money  questions  may 
be,  and  indeed  they  are  very  intricate,  our  present 
purpose  is  served,  as  I  have  just  intimated,  by 
summing  them  all  up  in  the  larger  question  of 
use  or  abuse,  in  the  sense  in  which  we  have  adopt- 
ed those  terms.  In  so  far  as  money,  whether 
of  "intrinsic"  or  of  "extrinsic"  value,  may  auto- 
matically operate  in  the  social  service  market  to 
divert  service  from  workers  to  idlers,  it  is  money 
in  course  of  abuse.  The  normal  healthful  pur- 
pose of  money  being  to  facilitate  the  distribu- 


ABUSE    OF    MONEY  59 

tion  of  social  services  fairly,  on  the  general  basis 
of  service  for  service,  any  kind  of  money  which 
operates  to  distribute  social  service  unfairly  falls 
into  the  pathological  category. 

I  shall  ask  you  to  consider,  then,  if  you  don't 
mind,  the  manner  in  a  general  way  in  which  gold 
or  silver  coinage,  or  paper  money,  or  any  other 
money  system  may  cause  unfairness  in  the  ex- 
changes of  the  social  service  market.  Do  you  re- 
member our  observations  as  to  the  currency  of 
money?  We  agreed,  you  will  recall,  that  money 
performs  its  function  as  an  intermediary  of  ex- 
change because  it  is  current — because  it  passes 
readily  from  hand  to  hand  as  a  token.  You  will 
remember  also  that  the  value  of  its  material,  the 
certainty  of  its  full  redemption  by  government, 
even  its  genuineness,  are  indifferent  matters  so 
long  as  each  person  to  whom  it  is  offered  for 
a  service  is  confident  that  the  person  to  whom  he 
offers  it  will  give  equal  service  for  it.  In  other 
words,  confidence  in  its  currency  is  the  life  of 
money.  Destroy  this  confidence  and  the  money 
is  dead  as  current  money,  for  it  no  longer  passes ; 
shake  this  confidence  and  the  money  is  shaky 
as  current  money,  for  it  no  longer  passes  readily. 
The  material  may  be  valuable,  dollar  for  dollar, 
or  the  government's  guarantee  or  a  business  es- 
tablishment's guarantee  be  perfectly  good,  and 
the  money  may  be  genuine  and  not  counterfeit; 
but  if  there  is  fear  that  the  next  man  to  whom 
the  money  is  offered  will  hesitate  or  refuse  to  take 
it,  its  currency  quality  is  on  the  road  to  destruc- 
tion. 

Now,  this  fear  may  be  caused  by  a  suspicion 
that  the  money  is  counterfeit,  or  an  impression 
that  its  material  is  worth  less  than  it  appears  to 
be,  or  that  the  government  will  not  or  cannot  re- 
deem it.  Consequently,  considerations  of  gen- 


60  SOCIAL    SERVICE 

uineness,  valuable  material,  or  certainty  of  gov- 
ernmental redemption,  do  enter  into  the  money 
question.  Although  they  are  matters  of  indiffer- 
ence so  long  as  confidence  exists  that  the  next 
man  will  take  the  money  when  it  is  offered  to 
him — so  long,  that  is,  as  confidence  in  its  cur- 
rency quality  exists — those  considerations  may 
become  highly  important  as  factors  in  determin- 
ing this  very  confidence.  The  reason,  did  you 
ask?  Credit.  Nearly  all  social  service  transac- 
tions are  necessarily  credit  transactions. 

Didn't  it  ever  occur  to  you  that  employers  get 
credit  of  a  week  or  a  month  from  their  work- 
men— credit  until  pay  day  ?  And  don't  many 
folks  buy  at  stores  on  credit?  You  give  credit  to 
your  patients,  for  they  pay  you  after  your  work 
is  done;  while  I  get  credit  from  my  clients,  who 
pay  me  retainers  before  my  work  begins.  Credit 
is  unavoidable,  unless  we  resort  to  primitive  bar- 
ter. Even  in  the  case  of  the  primitive  barter 
which  we  have  imagined,  that  of  Farmer  Doe's  do- 
ing a  day's  work  for  Farmer  Koe  in  haying,  don't 
you  remember?  in  exchange  for  a  day's  work  to 
be  done  in  harvest — even  in  that  case  Doe  gave 
credit  to  Roe.  It  is  indispensable  in  every  trade 
unless  the  parties  render  service  to  each  other 
concurrently,  which  could  happen  only  in  some 
instances,  such  as  a  carpenter  shingling  a  farm- 
er's roof  while  the  farmer  plows  the  carpenter's 
corn  lot.  All  such  credit  as  that  between  Doe  and 
Roe  is  purely  personal.  If  Roe  is  a  man  of  his 
word  and  lives,  Doe  will  get  his  day's  work  in 
harvest.  But  when  money  intervenes,  there  is 
a  different  kind  of  credit.  It  may  include  per- 
sonal credit,  as  in  the  case  of  Doe  and  Roe,  but 
it  includes  more.  It  includes  what  we  might  call 
currency  credit. 

Suppose  that  Roe,  instead  of  agreeing  to  pay 
Doe  for  the  day's  work  in  haying  with  a  day's 


ABUSE    OF     MONEY  61 

work  in  harvest,  should  agree  to  pay  in  money, 
and  should  in  fact  pay  "spot  cash."  In  that 
case  Eoe  is  under  no  further  obligation  to  Doe. 
There  is  no  credit  between  them.  But  Doe,  al- 
though he  has  the  money  which  discharges  Roe's 
obligation,  has  not  yet  got  the  service  he  will 
want  in  exchange  for  the  service  he  has  given. 
He  will  want  a  day's  work  in  harvest,  and  he  must 
get  it  by  means  of  the  money  he  has  earned  at 
haying.  Consequently  the  question  with  him  is 
whether  this  money,  representing  his  service  in 
.haying,  will  buy  him  an  equivalent  service  in 
harvesting  when  harvest  time  comes. 

If  we  were  to  suppose  that  the  payment  was  de- 
ferred, then  Doe  would  be  giving  personal  credit 
to  Roe  the  same  as  if  the  payment  were  to 
be  in  future  harvest  work;  but  as  the  transaction 
IB  in  money  terms,  he  would  also  be  giving  credit 
to  the  kind  of  money  in  which  he  is  to  be  paid. 
His  question,  then,  is  not  alone  whether  Roe  will 
pay  the  agreed  sum ;  it  is  also  whether  the  kind  of 
money  Roe  is  to  pay  will  buy  the  desired  harvest 
work. 

All  money  transactions,  whether  the  token 
passes  in  cash  payment  or  the  amount  is  credited 
in  terms  of  money,  involve  similar  considerations. 
Note  them  carefully.  First,  when  you  are  of- 
fered money  in  cash  payment  for  your  service,  you 
take  it,  or  refuse  it,  or  discount  it,  according  to 
whether  you  think  the  next  man  will  take  it  read- 
ily in  payment  for  his  service  of  equal  value  to 
yours.  Will  it  effect  for  you  a  fair  exchange  of 
service?  That  is  your  question  in  the  case  of 
cash  payments.  Second,  if  you  sell  your  service 
for  an  agreed  sum  in  money,  but  give  credit, 
thereby  bringing  in  the  element  of  deferred  pay- 
ment, your  question  is  not  only  whether  your 
debtor  will  pay  when  the  debt  matures,  but  also, 
•B  in  the  other  case,  whether  the  kind  of  money 


62  SOCIAL    SERVICE 

you  are  to  take  will  pass  current  on  the  same 
basis  in  the  future  as  now,  so  that  when  you  get 
it  yon  can  buy  in  service  the  equivalent  of  the 
service  you  have  sold.  These  are  the  considera- 
tions that  make  the  gold  question,  the  silver  ques- 
tion, the  greenback  question,  and  every  other 
money-system  question,  important.  They  are  the 
fundamental  considerations  by  which  the  details 
of  all  such  questions  must  be  tested. 

If  gold  is  more  stable  than  silver  in  point  of 
desirability  and  scarcity,  money  tokens  of  gold 
and  money  terms  translatable  into  specified  terms 
of  gold  as  a  commodity,  will  doubtless  have  a  tend- 
ency to  preserve  the  equilibrium  of  social  services 
in  exchange,  better  than  silver  tokens  or  money 
terms  translatable  into  terms  of  silver.  In  those 
circumstances  money  brokers  would  refuse  to  re- 
ceive silver  tokens  as  readily  as  gold;  and  from 
the  extension  of  their  example  among  their  cus- 
tomers, confidence  in  the  currency  of  silver  and 
in  the  stability  of  money  terms  translatable  into 
specified  terms  of  silver  as  a  commodity,  would  be 
shattered.  The  converse  is  equally  true,  for  pre- 
cisely the  same  thing  would  happen  to  gold  if 
currency  confidence  in  gold  tokens  and  gold  terms 
were  similarly  disturbed.  It  could  not  happen  to 
paper  currency  for  quite  the  same  reason,  since 
currency-giving  confidence  in  paper  money  does 
not  hark  back,  as  that  of  gold  and  silver  money 
does,  to  the  value  of  the  material.  But  as  cur- 
rency-confidence in  paper  money  does  hark  back 
to  th«  power  of  the  original  issuer  to  cause  re- 
demption in  full  in  social  service,  the  principle 
as  to  disturbances  of  currency  quality  is  the  same 
with  paper  as  with  gold  and  silver.  In  the  case 
of  paper  money,  a  spreading  distrust  of  the  value 
of  the  issuer's  promise  would  check  its  currency; 
in  the  case  of  gold  or  silver  money  it  would  be 
distrust  of  the  value  of  the  metal  of  which  the 


token  is  made.  Neither  consideration  is  of  any 
importance  except  as  it  may  produce  doubt  in  the 
public  mind — not  doubt  as  to  the  value  of  the 
money  material,  for  few  want  the  material,  nor 
as  to  the  value  of  the  ultimate  redeemer's  prom- 
ise, for  few  care  for  ultimate  redemption;  but 
doubt  as  to  whether  under  those  circumstances 
the  next  man  in  the  social  service  market  will 
take  these  tokens  as  currency  or  deal  on  the  basis 
of  these  money  terms.  When  that  doubt  arises, 
no  matter  how  or  why  the  doubt,  the  doubt  is  of 
vital  importance. 

Don't  you  see,  then,  how  alterations  in  money 
standards  may  operate  pathologically  in  social 
service?  If  they  alter  between  the  taking  and 
the  spending  of  money  tokens,  or  between  the 
making  and  the  payment  of  a  debt,  one  party 
to  the  exchange  will  either  get  more  service  than 
he  gives  or  give  more  service  than  he  gets.  This 
may  make  little  practical  difference — none  worth 
considering  perhaps — in  cash  transactions  or  on 
short  time  debts;  but  on  long  time  debts,  which 
are  usually  public  debts,  and  on  fixed  charges,  such 
as  statutory  salaries,  car  fares,  annuities,  and  the 
like,  it  might  make  a  great  difference. 

Interest?  Yes,  interest  is  a  money  question; 
but  not,  I  think,  in  the  way  that  some  of  our 
friends  suppose. 

If  money  standards  rise,  current  commercial 
interest  will  fall.  Didn't  you  notice  it  when 
gold,  the  money  standard,  was  dear  ?  Interest  and 
prices  both  fell.  But  when  money  standards  fall, 
current  commercial  interest  rises  just  as  prices 
do.  You  may  have  noticed  it  when  gold,  still  the 
money  standard,  was  cheap.  But  this  doesn't 
mean  that  money  itself  yields  interest.  It  means 
that  some  of  the  things  that  money  will  buy,  yield 
interest  in  cases  of  deferred  payment.  Although 


$4  SOCIAL     SERVICE 

"money  doesn't  breed,"  some  of  the  things  that 
money  buys  do  breed. 

The  reason  is  much  disputed,  but  isn't  the  fact 
plain?  And  doesn't  this  rise  of  interest  with  the 
fall  of  the  money  standard,  and  its  fall  with  the 
rise  of  the  standard,  go  to  prove  that  money  rep- 
resents interest  on  services  or  their  products,  in- 
etead  of  yielding  interest  itself  ?  Services  or  their 
products  being  dear  relatively  to  the  money  stand- 
ard, interest  on  account  of  deferred  payments  is 
correspondingly  dear;  services  or  their  products 
being  cheap  relatively  to  the  money  standard,  in- 
terest on  account  of  deferred  payments  is  rela- 
tively cheap.  That  is  all  there  is  to  it,  Doctor, 
except  the  explanations;  and  they  are  so  very 
metaphysical  and  contradictory  that  they  would 
make  your  head  swim.  We  needn't  consider  them 
now.  Some  time,  if  you  care  to  talk  over  the 
question  of  whether  interest  makes  for  unfair- 
ness in  the  interchange  of  social  service,  we  may 
do  it;  but  the  point  now  is  whether  interest  is  a 
money  question  or  not,  and  I  don't  think  it  is. 

But  you  mustn't  misunderstand  me.  At  times 
there  are  charges  for  money  which  are  mentally 
confused  with  interest.  When  money  is  said  to  be 
scarce,  interest  is  often  said  to  be  high.  This 
would  seem  to  contradict  the  idea  that  interest  is 
low  when  money  is  high,  but  it  doesn't.  Trace  to 
its  source  what  is  called  high  interest  for  scarce 
money,  and  you  will  find  one  of  two  things. 
Either  the  need  is  for  a  scarce  kind  of  money  and 
•t  once,  or  else  the  high  rate  is  not  for  the  money 
but  for  some  extra  service  or  for  the  risk. 

As  an  old  Sunday  school  boy,  Doctor,  you 
will  remember  the  New  Testament  story  of  the 
flagellation  in  the  Temple  at  Jerusalem.  Did 
you  ever  stop  to  think  what  the  money  chang- 
ers were  doing?  Yes,  they  were  selling  money  to 
their  brethren  at  a  premium.  But  why  were  their 


ABUSE     OF     MONEY  65 

brethren  willing  to  pay  a  premium?  Wasn't  the 
premium  the  price  of  a  particular  "legal  tender" 
under  circumstances  of  immediate  need  ?  It  was  not 
interest  for  deferred  payment.  Similar  instances 
have  occurred  in  our  own  day,  such  for  example 
as  the  high  price  of  legal  tender  in  times  of 
panic.  When  debts  can  be  discharged  only  with 
a  particular  kind  of  money,  and  that  kind  of 
money  is  scarce  while  creditors  are  pressing,  and 
non-payment  means  disaster,  ranging  from  cor- 
poral punishment  in  Roman  times  to  business 
ruin  in  ours — in  those  circumstances  legal  ten- 
der fetches  a  premium.  But  isn't  that  premium  a 
very  different  thing  from  interest  for  deferred 
payments  ? 

Premiums  for  loan  risks,  also  differing  dis- 
tinctly from  interest  for  deferred  payments,  are 
often  confused  with  it.  Very  well  do  both  you 
and  I  know  that  poor  people  borrowing  money 
have  to  pay  enormous — well,  we  will  call  it  "in- 
terest," since  that  is  what  they  call  it.  Pawnbrok- 
ers get  25  per  cent.,  and  "loan  sharks"  get  fabu- 
lous rates.  But  this  isn't  really  interest.  If  the 
pawnbroker  borrows  capital  at  the  bank  he  pays 
interest — say  6  per  cent.  But  he  gets  25  per  cent, 
from  his  customers  for  the  same  money.  How 
can  this  difference  of  19  per  cent,  be  interest?  If 
it  is  interest,  then  he  has  to  pay  for  his  storage 
room,  his  clerk  hire,  his  management,  and  so  on, 
out  of  the  interest  on  his  money.  Surely  some 
of  that  19  per  cent,  is  rent  and  not  interest  for 
deferred  payment,  and  some  of  it  is  wages  and  not 
interest  for  deferred  payment.  If  this  extra  19 
per  cent,  is  really  interest,  why  do  the  pawnbrok- 
er's customers  pay  it?  Why  don't  they  go  to  the 
bank  the  same  as  he  has  done  and  get  the  money 
at  6  per  cent,  as  he  does?  Isn't  it  because  the 
bank  won't  trust  them  as  it  trusts  him?  No, 
Doctor,  the  high  rates  that  people  pay  pawnbrok- 


66  SOCIAL     SERVICE 

ers  and  "loan  sharks,"  and  which  they  confuse 
with  interest  on  deferred  payments  in  thinking 
of  the  transaction,  are  for  the  most  part  for  rent, 
wages,  and  risk  of  loss.  The  interest  for  de- 
ferred payment  which  those  rates  include  is  com- 
paratively a  trifle. 

I  was  reading  one  day  in  Moody's  Magazine  for 
July,  1907,  an  explanation  of  the  "loan  shark" 
business  by  Daniel  Kiefer  of  Cincinnati.  You 
know  of  Kiefer.  He  was  formerly  secretary  of 
the  Citizens'  Mortgage  Loan  Company  of  Cincin- 
nati, an  organization  intended  to  save  poor  bor- 
rowers from  "loan  sharks"  by  lending  at  a  profit 
to  the  company  of  only  5  per  cent.  net.  It  suc- 
ceeded. But  its  promoters  learned  a  curious  les- 
son about  "loan  shark"  interest.  In  order  to  get 
5  per  cent,  net  on  its  capital,  it  had  to  charge,  as 
Mr.  Kiefer  explains,  ll1/^  per  cent,  per  annum 
for  $200  loans  for  a  year,  and  as  much  as  48  per 
cent,  per  annum  for  loans  of  $10  for  three  months. 
Why?  Pardon  me  a  moment  till  I  get  Moody's 
and  I  will  answer  you  with  an  extract.  Here  is 
what  Kiefer  says  of  the  "loan  shark"  business: 
"Interest  on  capital  is  a  very  small  item  of  ex- 
pense in  conducting  a  business  of  this  kind.  Oper- 
ating expenses  and  losses  for  bad  loans  must  all 
be  paid  out  of  usurious  interest  before  the  'shark* 
will  have  anything  for  himself.  A  concern  hay- 
ing $10,000  invested  in  a  business  of  this  kind 
in  any  large  city  will  need  an  office  force  of  four 
reliable  and  experienced  employes  whose  aggregate 
annual  salary  will  be  at  least  $2,500 ;  and  other  in- 
evitable expenses  will  be  at  least  $3,000  more.  In- 
terest on  capital  will  be  $600.  Losses  from  bad 
loans  will  be  anywhere  from  $500  to  $5,000,  ac- 
cording to  judgment  displayed  in  making  loans, 
according  to  the  manner  in  which  delinquents  are 
handled,  and  according  to  local  industrial  condi- 
tions." Don't  you  see  that  interest  on  deferred 


ABUSE    OF    MONEY  67 

payments  is  a  small  fraction  of  the  ruinous  rate 
the  poor  borrower  has  to  pay?  But  let  me  read 
further.  Referring  to  the  charity  loan  society  of 
which  he  was  secretary,  Mr.  Kiefer  goes  on :  <0Th« 
rejected  applicants  must  go  to  the  ordinary  'sharks' 
for  aid.  Of  course  if  it  is  not  safe  for  the  charity 
organization  to  grant  any  of  these  a  10-dollar 
loan  at  the  rate  of  48  per  cent.,  it  is  not  safe  for 
the  'shark*  either.  In  taking  the  chances  he  must 
charge  a  much  higher  rate." 

I  have  mentioned  the  "loan  sharks"  as  an  ex- 
treme illustration.  But  the  principle  holds  good 
throughout  the  social  service  market.  So-called 
interest  above  the  gilt-edge  bank  rate  is  not  inter- 
est for  deferred  payment.  It  includes  interest, 
of  course,  but  for  the  most  part  it  is  made  up  of 
expenses  of  doing  the  business  and  of  insurance 
against  loss  for  risk.  The  principal  item  is  for 
the  risk.  As  this  is  paid  in  the  name  of  interest, 
we  carelessly  think  of  it  as  interest;  but  it  is  as 
different  from  interest  as  is  the  premium  on  any 
other  kind  of  insurance.  Get  your  loan  insured, 
and  you  can  borrow  at  ordinary  interest  rates,  no 
matter  who  you  are  nor  how  poor  you  may  be. 

When  you  hear  of  high  interest  on  money  you 
will  find  if  you  examine  into  it  that  instead  of 
high  interest  it  is  high  insurance.  When  you 
hear  of  scarcity  of  money  in  explanation  of  high 
interest  you  will  find,  almost  without  exception, 
that  it  is  not  money  that  is  scarce,  but  credit  that 
is  non-existent  or  disturbed.  As  Emory  Storrs 
once  said,  after  being  frequently  told  at  banks 
that  money  was  plentiful,  yet  whenever  he  tried 
to  borrow  was  asked  for  collateral  he  did  not  pos- 
sess, "It  isn't  money  that's  scarce,  it's  collateral." 

If  we  pay  interest — true  interest  as  distin- 
guished from  wages  and  insurance  premiums,  in- 
terest as  compensation,  or  extortion,  or  whatever 


68  SOCIAL     SERVICE 

you  will,  for  deferred  payments — we  are  paying  it 
not  for  money  but  for  commodities,  not  for  legal 
tender  but  for  some  benefit  which  the  social 
service  we  really  borrow  will  yield  us  .simply 
through  lapse  of  time,  and  which  the  lender  will 
lose  unless  he  gets  interest.  Were  we  to  borrow 
sheep,  we  might  have  to  return  not  only  the  sheep 
but  some  of  the  lambs  and  some  of  the  wool — a 
share  of  the  natural  increase  of  the  flock.  Were 
we  to  borrow  bees,  we  might  have  to  return  not 
only  the  bees  but  a  share  of  their  honey.  Were 
we  to  borrow  a  field  of  growing  grain,  we  might 
have  to  return  not  only  the  worth  of  the  field  in 
the  Spring  but  a  share  of  its  additional  worth  at 
harvest.  It  would  be  the  same  if  we  borrowed 
money  and  bought  those  things.  When  we  borrow 
money,  and  with  the  borrowed  money  buy  objects, 
the  interest  we  pay  for  the  money  is  not  truly  in- 
terest on  money.  It  has  to  do  with  the  objects  we 
buy.  Whether  or  not  this  is  an  abuse,  depends 
upon  whether  borrowing  and  lending  conditions 
are  free  or  coercive. 

And  now,  Doctor,  before  going  on,  let  us  turn 
back  a  moment  to  a  point  we  have  already  consid- 
ered, that  the  "intrinsic  value"  of  money  is  of 
comparatively  little  practical  importance  in  cur- 
rent exchanges  of  social  service.  That  is  to  say, 
the  abuses  of  money  that  are  properly  attributable 
to  rariations  in  the  intrinsic  value  of  its  material, 
are  of  short  duration  and  relatively  of  no  great 
magnitude.  Creditors  may  gain  or  lose  the  bene- 
fit in  some  degree  of  past  services,  and  debtors 
may  correspondingly  lose  or  gain.  The  owners  of 
concrete  forms  of  past  services  held  in  store  ai 
merchandise,  may  gain  or  lose  and  their  custom- 
ers correspondingly  lose  or  gain.  The  effect  is 
like  that  of  the  collapse  of  Confederate  currency, 
or  the  detection  of  a  counterfeit  coin  that  has 
been  current.  If  we  lose,  we  lose  social  service 


ABUSE     OF    MONEY  69 

rights  that  we  had  accumulated  in  the  past,  but 
not  the  power  of  exchanging  service  and  accumu- 
lating social  service  rights  in  the  future.  It  may 
spell  temporary  loss,  but  not  continuous  en- 
•lavement. 

Indispensable  as  are  money  and  money  terms  ia 
effecting  exchanges  of  social  service,  and  disas- 
trous as  for  a  time  may  be  the  effects  of  unsci- 
entific money  systems  when  they  break  down,  the 
great  fundamental  abuses  of  money  in  the  sens* 
in  which  we  are  using  the  word  "abuse/'  as  fos- 
tering unfairness  in  social  service  exchanges,  does 
not  lurk  in  the  defects  of  money  systems.  No 
matter  how  perfect  your  money  system,  Doctor, 
you  may  find  money  still  operating  to  distribute 
social  service  unfairly.  I  have  heard  it  said  that 
the  better  your  money  system,  the  slicker  it  might 
work  in  promoting  that  unfairness,  and  I  am  not 
sure  that  this  is  as  extravagant  as  it  sounds. 

Do  you  care  to  consider  how  money,  although 
of  a  perfect  system,  may  be  subject  to  abuse  in  the 
sense  in  which  we  are  distinguishing  the  use  of 
money  from  its  abuse  f  Then  you  will  have  to 
help  me  solve  the  primary  riddle  of  social  service. 
What  is  that?  Well,  not  much  of  a  riddle.  Only 
this :  Why  do  men  serve  one  another  by  swapping 
service?  What  is  their  motive? 

Seems  profoundly  psychological,  doesn't  it? 
Maybe  it  is.  And  doubtless  an  expert  could 
make  it  exasperatingly  difficult.  But  it  isn't  dif- 
Icult.  It's  as  easy  as  wanting  to  eat. 


CHAPTER  IV. 

Individual   Self-Service    the    Primary     Impulse 
of  Social  Service. 

What  is  the  primary  impulse  of  social  service? 
why  do  we  habitually  serve  one  another  by  swap- 
ping individual  services?  That  is  our  riddle, 
isn't  it,  Doctor? 

I  have  already  told  you  that  the  answer  is  as 
easy  as  wanting  to  eat,  and  so  it  is.  We  serve 
one  another  because  it  is  the  easiest  way  of  serv- 
ing ourselves.  That  is  the  primary  impulse,  the 
natural  law.  Social  service  originates  in  indivi- 
dual desires  for  easy  self-service.  Aye,  and  mind 
you,  its  continuance  as  well  as  its  origin  depends 
upon  those  desires.  Banish  from  human  nature 
the  individual  desire  for  easy  self-service,  and 
social  service  would  be  at  an  end.  We  serve 
others  in  order  to  get  easy  money  with  which  to 
hire  others  to  serve  us. 

Sounds  pretty  sordid,  doesn't  it? — pretty  dis- 
gustingly selfish.  But  no,  it  is  neither  sordid  nor 
selfish  in  its  'Tiealthological"  aspects,  although  it 
becomes  an  expression  of  both  in  pathological  con- 
ditions. But  I  am  not  going  to  encourage  your 
professional  instinct  for  the  pathological, — not 
very  much  for  the  present  anyhow.  We  must 
understand  the  normal  before  we  try  to  figure  out 
the  pathological ;  and  I  shouldn't  say  anything  at 
all  about  the  pathological  now,  if  it  were  not  for 
your  question  regarding  hospitality  and  charity 
as  proof  of  altruism  in  social  service. 

Yes,  indeed,  the  myriads  of  instances  of  perso- 


INDIVIDUAL     SELF-SERVICE  71 

nal  hospitality,  and  the  records  of  our  magnificent 
charities,  do  go  to  prove  that  men  are  altruistic. 
But  they  do  not  go  to  prove  that  those  habitual 
interchanges  of  service  of  which  you  and  I  have 
been  talking  and  which  constitute  social  service 
in  normal  as  distinguished  from  pathological  con- 
ditions— I  say  that  hospitality  and  charity  do  not 
go  to  prove  that  these  interchanges  originate  in 
and  depend  upon  altruistic  impulses.  Society 
could  not  subsist  upon  charity.  Though  hospi- 
tality and  charity  were  never  so  altruistic  as  to 
their  impulses — and  that  isn't  invariable,  you 
know,  Doctor,  don't  you? — yet  neither  the  one 
nor  the  other  would  be  the  kind  of  social  service 
that  keeps  the  world  a-going. 

Oh,  I  beg  of  you,  flon't  misunderstand  me.  I 
am  not  assailing  either  hospitality  or  charity. 
True  hospitality  is  wholesome  always.  This  world 
would  be  a  desert  indeed  without  it.  Even  of 
charities  I  would  say  only  the  kindest  words. 
Useful?  To  be  sure  charities  are  useful,  just  as 
your  medicines  are  useful — useful  in  disease. 
But  in  a  healthy  state  of  the  social  body,  charities 
would  be  like  poultices  on  a  healthy  physical  body 
— a  "demned  damp  disagreeable"  impertinence. 
Whenever  your  boastful  enthusiasm  warms  up 
over  our  magnificent  charities,  Doctor,  you  had 
better  cool  it  off  a  little  with  reflections  upon 
what  it  is  that  our  magnificent  charities  imply. 
Don't  you  see  that  we  shouldn't  have  any  magni- 
ficent charities  unless  we  had  a  whole  lot  of 
mighty  un-magnificent  poverty?  We  shouldn't 
provide  magnificently  for  ameliorating  the  condi- 
tion of  the  worthy  poor,  should  we,  unless  there 
were  hosts  of  worthy  poor  whose  condition  needs 
amelioration?  Our  magnificent  charities  for 
their  relief  prove  something  much  less  exhilarat- 
ing than  that  human  nature  is  altruistic.  They 
prove  a  deplorable  pathological  condition  of  hu- 


72  SOCIAL     SERVICE 

man  society — a  condition  withal  which  is  not  with- 
out persistent  hints  of  a  possible  relation  as  of 
effect  to  cause  between  worthy  poor  and  unworthy 
rich.  A  cynical  friend  of  ours  used  to  say  re- 
peatedly— you  must  have  heard  him;  he  bor- 
rowed it  from  a  book  I  reckon — he  used  to  say 
that  "charity  is  oftentimes  a  form  of  self-right- 
eousness which  inspires  us  to  give  to  others  a  part 
of  what  already  belongs  to  them."  That  is  rather 
extreme,  perhaps;  but  suggestive,  Doctor,  sug- 
gestive. Whenever  I  hear  of  the  charitable  dona- 
tions of  certain  classes  of  rich  people  in  aid  of 
poor  people,  an  old  nursery  rhyme  flutters 
through  my  memory,  don't  you  know,  in  spite  of 
all  my  efforts  to  shoo  it  out.  I'll  have  to  give  it 
the  right-of-way  now,  I  guess,  and  get  rid  of  it, 
or  I  shant  be  able  to  rally  my  thoughts : 

There  was  once  a  considerate  crocodile, 
Which  lay  on  a  bank  of  the  river  Nile; 
He  swallowed  a  fish  with  a  face  of  woe, 
While  his  tears  flowed  fast  to  the  stream  below: 
"I  am  mourning,"  said  he,  "the  untimely  fate 
Of  the  poor  little  fish  which  I  just  now  ate." 

Oh,  granted!  granted!  All  you  say  about 
charity's  pulling  unfortunates  out  of  quagmires 
is  granted.  "Victims"  would  be  a  more  definite 
term  than  "unfortunates,"  though,  and  quite  as 
true,  don't  you  think?  But  never  mind  that 
distinction  now.  Granting  what  you  say  in  behalf 
of  charities,  much  of  which  I  approve  very  cor- 
dially, and  granting  what  you  say  so  convincingly 
of  the  influence  of  hospitality  in  keeping  up  a 
brotherly  human  spirit,  to  all  of  which  I  respond 
"Amen!"  from  my  heart, — yet  I  again  insist,  and 
you  cannot  deny,  that  it  is  neither  hospitality  nor 
charity  that  keeps  normal  social  service  a-going. 

"If  all  men  are  beggars,  from  whom  shall  men 
beg?"  Did  you  never  read  that?  It's  from  the 
"Mendicant,"  by  George  Francis  Savage  Arm- 


INDIVIDUAL    SELF-SERVICE  73 

strong;  and  he  hit  the  mark  plumb  in  the  center 
when  he  wrote  it.  Bear  with  me  again  for  a 
moment,  Doctor: 

Sakya-Muni,  Gautama  Buddha,  what  dost  thou  prof- 
fer of  hope  or  of  mirth? 

"What  shall  I  do  to  be  saved"  from  the  sorrow,  pas- 
sion and  terror,  and  madness  of  earth? 

What  is  thy  gospel,  O  prophet  of  India?  What  hast 
thou  left  to  me,  child  of  the  sun? 

What  is  the  balm  for  my  pain  thou  hast  promised 
me?  What  is  the  crown  when  the  race  hath 
been  run? 

"What  shall  I  do  to  be  saved?"  Thou  hast  answered 

it:  "Labor  not  forever,  but  beg  for  thy  bread; 
Live  as  a  mendicant;  marry  not;  mortify  flesh;  let 

a  life  of  Nirvana  be  led. 
So   shalt  thou  find  in  the   depth  of  thy   passions, 

growth  of  thy  spirit,  composure  and  rest, 
Passing  through  indolent  days  of  humanity  on  to 

intangible  joys  of  the  blest." 

Sakya-Muni,  Gautama  Buddha,  bending  I  heed  thee, 

but  find  in  thy  law 
Something  that  baffles  me,  doubtful  consistency — lo, 

in  the  weft  of  thy  wisdom  a  flaw — 
Look  to  it,  Gautama,  Sakya-Muni,  sweet  is  the  bul- 

bul,  but  hollow  her  egg. 
How  shall  thy  gospel  suffice  for  the  many?     If  all 

men  are  beggars,  from  whom  shall  men  beg? 

Can't  we  make  Armstrong's  wholesome  ques- 
tion apply  to  our  little  confab?  If  all  men  are 
givers  but.  not  getters,  what  withal  shall  they 
give?  Ah,  it  is  neither  giving  alone  nor  getting 
alone,  but  mutuality  of  giving  and  getting,  that 
distinguishes  normal  social  life.  It  is  the  cease- 
less interchanges  of  individual  services  of  which 
we  have  already  talked  so  much,  that  constitute 
the  life  current  of  social  service.  And  those 
ceaseless  interchanges  are  generated  and  main- 
tained, not  by  charity,  which  is  a  pathological 
symptom,  not  by  hospitality,  which  is  a  delight- 
ful effect  of  social  service  but  not  the  vital  cause, 
not  by  altruistic  impulses  of  any  sort  however 


74  SOCIAL    SERVICE 

noble.  They  are  generated  and  maintained  by  the 
simple,  matter-of-fact,  work-a-day,  self-serving 
impulse  of  each  individual  to  satisfy  his  own  de- 
sires as  easily  as  possible.  We  engage  in  social 
service  habitually  because,  to  recur  to  the  verna- 
cular, we  want  easy  money. 

True  enough,  the  money  we  get  in  this  way  may 
not  be  such  all-fired  easy  money  either ;  but  it  buys 
us  more  of  the  things  we  want,  and  better  ones, 
than  we  could  get  with  equal  exertion  by  making 
them  ourselves.  The  self-serving  impulse  does 
indeed  lead  on  to  all  manner  of  oppression,  from 
vulgar  robbery  to  respectable  graft,  from  plunder- 
ing laws  to  grinding  institutions.  But  this  comes 
from  a  perverted  desire  for  easy  money,  springing 
out  of  pathological  social  conditions.  In  normal 
social  conditions  the  tendency  of  the  self-serving 
impulse  is  toward  heights  of  altruism  of  which 
the  mere  giver  can  never  know. 

Don't  you  remember  how  Henry  George  in  his 
Introduction  to  "Progress  and  Poverty" — ah,  yes, 
I  recall ;  you've  never  read  "Progress  and  Poverty/' 
Well,  as  I've  often  told  you,  I  envy  you  the  intel- 
lectual banquet  you  have  in  store.  When  you  read 
it,  do  me  a  favor,  won't  you?  Don't  stumble 
through  it  as  its  critics  have  done,  I  beg  of  you, 
but  read  it,  really  and  truly  read  it.  Now,  in 
the  Introduction  to  that  book  you  will  find  that 
what  I  have  been  saying  to  you  on  this  point  is 
formulated  into  a  fundamental  law  or  axiom  of 
political  economy.  So  far  as  I  know,  George  was 
the  first  political  economist  to  recognize  the  great 
importance  of  this  law.  He  certainly  was  the  first 
to  emphasize  it.  Yet  it  is  the  key  to  the  science  of 
social  service.  The  reason  that  professional  econo- 
mists touch  it  so  gingerly  is,  I  suspect,  because 
they  fear  that  any  thinker  who  uses  it  as  accurate- 
ly and  fearlessly  as  Gteorge  did,  would  open  the 
same  door  that  he  opened;  and  that  would  be  so 


INDIVIDUAL    SELF-SERVICE  75 

much  the  worse  for  folks  who  live  in  the  sweat 
of  other  folks'  faces.  Here's  a  copy  of  "Progress 
and  Poverty"  which  you  may  take  with  you  if  you 
wish,  but  I'll  read  the  paragraph  about  self 
service  now:  "Political  economy  is  not  a  set  of 
dogmas.  It  is  the  explanation  of  a  certain  set  of 
facts.  It  is  the  science  which,  in  the  sequence  of 
certain  phenomena,  seeks  to  trace  .mutual  relations 
and  to  identify  cause  and  effect,  just  as  the  physi- 
cal sciences  seek  to  do  in  other  sets  of  phenomena. 
It  lays  its  foundations  upon  firm  ground.  The 
premises  from  which  it  makes  its  deductions  are 
truths  which  have  the  highest  sanction;  axioms 
which  we  all  recognize;  upon  which  we  safely 
base  the  reasoning  and  actions  of  every-day  life, 
and  which  may  be  reduced  to  the  metaphysical 
expression  of  the  physical  law  that  motion  seeks 
the  line  of  least  resistance — viz.,  that  men  seek 
to  gratify  their  desires  with  the  least  exertion." 

Not  morally  right,  Doctor,  for  men  to  do 
this!  Why,  how  can  you  say  of  anything  that  it's 
not  morally  right,  when  you  are  constantly  argu- 
ing that  there  is  no  such  thing  as  right  and  wrong, 
but  only  facts  ?  I  guess  it's  a  fact  all  right,  isn't 
it?  I  wish  I  had  George's  "Science  of  Political 
Economy"  here,  for  in  that  book  he  deals  with  his 
sociological  axiom  more  elaborately.  Although 
the  book  fell  from  his  hand  unfinished  at  his 
death,  he  had  so  far  completed  it  as  to  outline  the 
natural  foundations  of  political  economy.  In 
many  particulars  he  had  finished  his  work.  But 
in  other  respects  it  is  left  for  after  hands  to  do ; 
and  one  of  these  days,  when  political  economy — 
which,  by  the  way,  is  only  another  name  for  the 
science  of  social  service — shall  have  emerged 
from  the  bewildering  maze  in  which  it  is  flounder- 
ing now,  some  of  its  accredited  professors  may 
worthily  complete  the  work  that  George  began. 

In  this  book  George  explains,  what  should  have 


76  SOCIAL    SERVICE 

needed  no  explanation,  that  his  sociological  axiom, 
"men  seek  to  gratify  their  desires  with  the  least 
exertior,"  is  not  an  excuse  for  selfishness  and 
oppression.  It  is  simply  a  law  of  human  energy, 
operative  alike  with  the  just  and  the  unjust,  the 
altruistic  and  the  selfish.  Precisely  as  the  analo- 
gous law  of  physical  energy  causes  the  Mississippi 
to  bend  and  turn  along  the  line  of  least  physical 
resistance,  whether  it  ruins  a  planter  by  sweeping 
away  his  plantation,  or  accommodates  him  by 
floating  boats  up  to  his  private  wharf,  so  this  law 
of  human  energy  causes  men  to  gratify  their  indi- 
vidual desires  along  the  line  of  least  individual 
irksomeness,  whether  their  desires  be  selfishly  to 
rob  their  fellows  or  altruistically  to  co-operate 
with  them.  Why,  old  Simon  D.  Sampson  doesn't 
obey  this  fundamental  law  of  human  nature  in  his 
sordidly  selfish  career  any  more  closely  than  Jane 
Addams  does  in  her  altruistic  settlement  work. 
And  Edison  is  a  very  type  of  its  influence  in 
intensifying  co-operation  through  invention. 

Can  you  think,  Doctor,  of  anything  in  this 
Georgian  law  of  social  service  to  controvert?  Isn't 
it  too  plain  for  dispute,  that  whatever  our  desires 
may  be  we  seek  to  gratify  them  with  the  least 
exertion  ?  Isn't  it  a  genuine  natural  law  ?  What's 
that  you  say?  Oh,  your  old  notion  that  there's 
no  such  thing  as  natural  law  outside  the  realm 
of  the  physical.  Well,  that  depends  upon  how 
narrow  you  make  your  term  "natural."  But  I  am 
not  going  to  be  diverted  into  any  philosophical 
"rag-chewing."  Haven't  I  made  it  clear  that 
what  I  mean  by  calling  George's  axiom  a  natural 
law  is  that  it  describes  a  characteristic  tendency 
of  human  nature?  Within  the  sphere  of  human 
nature,  which  your  physical  scientists  have  hard- 
ly explored  but  which  is  easily  within  the 
realm  of  human  observation  and  experience,  the 
Georgian  axiom  is  as  universal  and  invariable,  if 


.     INDIVIDUAL     SELF-SERVICE  77 

our  perceptions  are  of  any  use  to  us  at  all,  as  the 
physical  law  of  the  line  of  least  resistance  or  the 
physical  law  of  gravitation.  I  don't  believe  you 
will  deny  that. 

No  instance  really  out  of  gear  with  this  law 
of  human  dynamics  has  ever  come  to  my  atten- 
tion, and  I  reckon  I  am  safe  in  saying  the  same 
for  you.  Whenever  a  man's  exertion  is  apparently 
unnecessary,  he  is  nevertheless  as  responsive  to 
George's  law  as  if  it  were  necessary.  He  may  be 
seeking  the  effort  itself  instead  of  something  be- 
yond, as  when  you  find  him  walking  laboriously 
although  he  might  ride  easily.  Or,  he  may  find 
that  the  effort  in  preparing  an  easy  device  out- 
weighs the  effort  saved  by  the  device,  as  if  he 
should  carry  a  load  of  corn  in  a  wagon  though 
it  could  be  so  much  more  easily  and  swiftly  car- 
ried by  railway  if  the  exertion  of  building  the 
railway  would  not  exceed  the  economy  of  its  use 
for  an  occasional  load  of  corn.  Or,  he  might 
go  a  mile  or  more  up  the  creek  for  a  ford,  and 
back  again  on  the  other  side,  because  the  shorter 
way  across  would  necessitate  great  preliminary 
exertion  in  building  a  bridge.  But  the  apparent 
exceptions  that  most  readily  mislead  are  probably 
those  that  spring  from  ignorance  of  the  easiest 
way  of  doing  a  thing,  as  if  we  gathered  grain 
with  a  sickle  instead  of  a  reaper ;  or  ignorance  of 
the  easiest  way  coupled  with  a  lively  apprehen- 
sion of  the  dangers  it  may  involve,  as  if  we  go  to 
farming  in  the  year  of  our  Lord  1620  on  the  rock- 
bound  coast  of  New  England,  though  empire*  of 
rich  prairie  lie  fallow  in  the  distant  Mississippi 
Valley  with  warlike  tribes  between.  But  no  such 
instances  discredit  the  law.  The  object  desired 
is  in  each  case  accomplished  in  the  easiest  way, 
all  things  considered. 

Within  the  range  of  our  knowledge  and  the 
circumstances  of  our  situation,  we  invariably  seek 


78  SOCIAL    SERVICE 

to  gratify  our  desires  with  the  least  effort,  the 
least  exertion,  at  the  cost  of  the  least  irksomeness 
to  ourselves  individually.  Whether  our  desires 
are  straight  or  crooked,  human  or  brutal,  angelic 
or  devilish,  social  or  anti-social,  co-operative  or 
disruptive,  industrial  or  recreative,  we  seek  their 
gratification  as  the  river  seeks  the  sea — along 
the  line  of  least  resistance. 

See  those  boys  playing  ball  over  there  in  Samp- 
son's vacant  lot.  Old  codgers  like  you  and  me 
may  think  their  violent  exertion  needless — all  of 
it ;  but  that  is  because  we  don't  want  to  play  ball 
and  they  do.  Or  we  may  think  some  of  it  need- 
less; but  that  is  because  we  are  not  in  the  game 
and  .they  are.  If  you  suppose  they  make  any 
needless  exertion  for  the  end  they  seek,  ask  them, 
and  I  think  they  will  tell  you  that  you  are  mis- 
taken. Should  you  want  a  test,  fool  them  into 
searching  in  the  wrong  place  for  a  lost  ball  and 
make  a  note  of  the  compliments  you  get  for  your 
trick. 

If  we  turn  from  play  to  crime,  still  the  law 
holds  good.  That  burglar  who  got  into  your 
house  last  winter — he  might  more  easily  have 
gone  to  the  roof  and  come  down  through  the 
scuttle,  but  he  didn't  know  that  you  had  left  the 
scuttle  unlocked.  He  could  have  broken  in  your 
door  or  smashed  a  window,  but  that  would  have 
made  a  noise  and  might  have  led  to  his  capture, 
which  wasn't  one  of  the  desires  he  was  seeking 
to  gratify.  What  he  did,  so  you  told  me,  was  to 
cut  a  piece  carefully  out  of  one  of  your  windows, 
put  his  arm  through,  release  the  catch,  and  then 
noiselessly  raise  the  sash.  It  was  not  in  fact  the 
easiest  way  to  get  into  your  house,  but  it  was  the 
easiest  way  of  whieh  he  knew  to  gratify  his  desire 
for  your  watch  and  spoons  and  unbanked  money. 

And,  Doctor,  don't  imagine  that  the  Georgian 
law  in  its  application  to  crime  relates  to  physical 


INDIVIDUAL    SELF-SERVICE  78 

obstacles  only.  It  relates  also  to  mental  and  mor- 
al obstacles.  Physical  force  seeks  its  line  of  least 
resistance  along  the  weaker  coherences  of  matter, 
as  when  a  cartridge  is  discharged  from  a  rifle. 
Animal  force  seeks  its  line  of  least  resistance 
along  the  easier  path  with  reference  to  mental 
and  bodily  effort,  as  in  the  case  of  a  brute  after 
prey.  But  human  force  seeks  its  line  of  least 
resistance  with  reference  not  only  to  physical 
obstructions  and  mental  and  bodily  effort,  but  also 
to  moral  considerations.  We  can  easily  see  that 
your  burglar  would  have  stayed  out  of  your  house 
if  his  desire  for  your  loose  valuables  had  been 
outbalanced  by  his  appreciation  of  the  physical 
difficulties  and  dangers  of  getting  them.  But  isn't 
it  just  as  probable  that  he  would  have  stayed  out 
if  his  desire  for  the  valuables  had  been  outbalanced 
by  mental  fear  of  detection,  or  moral  repugnance 
to  invading  your  privacy  and  divesting  you  of 
your  property?  In  considering  what  constitutes 
the  line  of  resistance  to  criminal  conduct,  we  must 
take  into  account,  don't  you  see?  not  only  the 
physical  difficulties,  but  also  mental  and  moral 
sensibilities,  and  weigh  them  all  in  the  bal- 
ance against  the  object  desired.  When  we  have 
done  this,  we  shall  probably  suspect  that  the  worst 
criminals  are  not  in  jail,  and  we  may  prudently 
conclude  that  we  wouldn't  like  to  be  searched  our- 
selves. 

There  is  that  stable  boy  you  had  a  year  or 
two  ago — the  one  you  humiliated  by  making  him 
wear  a  uniform  which  advertised  him  as  your 
own  private  property.  You  discharged  him  for 
petty  stealing,  and  you  think  of  him  yet  as  a 
thief,  while  you  think  of  his  successor  as  an  honest 
boy.  It  happens,  now,  that  I  know  something 
about  both  of  those  boys  of  which  you  are  ignor- 
ant. Never  mind  how  I  came  to  know,  but  I  do 
know  that  both  wanted  to  pilfer  from  you.  Or, 


80  SOCIAL    SERVICE 

rather — and  this  is  the  better  way  of  putting  it—- 
each of  them  wanted  more  money  for  his  work 
than  you  paid  him.  They  both  felt  that  they 
couldn't  buy  as  much  service  of  other  people  with 
their  wages  as  they  gave  to  you.  Of  course,  this 
was  a  wicked  feeling,  I  admit  you  that;  a  con- 
tract is  a  contract,  and  you  always  did  pay  extra 
wages  for  extra  work.  But  I  am  not  making  a 
plea  for  the  boys,  I  am  only  stating  facts. 

Well,  the  first  boy  didn't  want  to  do  extea 
work  for  the  extra  pay.  You  know  yourself  he 
was  a  bilious  sort  of  boy;  we  called  him  lazy,  for 
epithets  are  cheap.  Yet  he  did  want  the  extra 
pay.  So  he  shirked  the  extra  work  and  took  the 
extra  pay  unbeknownst  to  you.  One  factor  in 
this  deplorable  result  was  the  boy's  bodily  slug- 
gishness ;  another  was  the  easy  opportunity  lie  had 
for  pilfering;  another  was  a  mental  haziness  cor- 
responding to  his  bodily  sluggishness,  which 
made  him  think  he  could  "get  away  with  the 
goods ;"  and  another  was  defective  moral  training 
and  a  comatose  moral  sense.  In  these  circum- 
stances his  desire  for  easier  money  sought  grati- 
fication in  theft  instead  of  honest  work. 

But  the  other  boy,  who  is  not  bilious  and  we 
call  him  industrious — he  doesn't  steal.  It  is  not 
because  he  may  not  want  to.  I  have  reason  to 
believe  he  does,  and  that  he  would  if  that  seemed 
to  him  the  line  of  least  resistance  to  easy  money 
as  it  did  to  the  first  boy.  His  moral  sense  also 
is  comatose.  But  don't  worry.  Your  petty  cash 
is  as  safe  with  this  boy  as  in  the  Bank  of  Mon- 
treal. He  won't  steal  small  sums.  No,  nor  large 
ones  either  in  any  unlawful  way.  His  opportunity 
for  pilfering  from  you  is  just  as  good  as  that  of 
the  first  boy,  and  so  you  might  say  that  the  phys- 
ical line  of  resistance  is  the  same.  But  you 
must  not  forget  that  the  first  boy  was  tempera- 
mentally lazy  and  the  second  is  not,  and  that 


INDIVIDUAL,     SELF-SERVICE  81 

these  are  considerations  in  determining  the  rela- 
tive line  of  physical  resistance.  As  to  mental  re- 
sistance, the  second  boy  is  bright  enough  to  know 
that  he  will  get  caught,  and  self-respecting  enough 
— so  self-respecting  that  the  sturdy  little  demo- 
crat wouldn't  demean  himself  by  wearing  your  pro- 
prietary uniform, — he  is  self-respecting  enough,  I 
say,  to  have  a  horror  of  the  possibility  of  getting 
into  jail.  Besides  that,  his  moral  training  as  we 
call  it,  has  not  been  so  much  neglected  as  the 
other  boy's  was.  He  has  been  fed  at  school  and 
Sunday  school  upon  skim-milk  morality — "hon- 
esty is  the  best  policy,"  and  all  that  sort  of  thing, 
you  know,  which  works  well  enough  superficially, 
— and  you  can  depend  upon  him  to  do  nothing 
in  the  way  of  dishonesty  which  is  bad  in  the  way 
of  policy.  Under  these  circumstances,  pilfering 
is  not  the  line  of  least  resistance  with  this  boy, 
as  under  the  circumstances  of  the  other  it  was 
with  him;  so,  whereas  the  other  boy  took  your 
extra  wages  without  doing  extra  work,  this  boy 
gives  you  extra  work  for  your  extra  wages. 

There  is  great  promise  in  him  of  a  prosperous 
man — what  is  called  a  successful  man.  He  has 
the  right  balance  for  it,  including  his  comatose 
moral  sense.  Unless  that  sense  awakens  in  him, 
he  may  rise  even  to  lofty  heights  in  affairs.  For 
he  appreciates  the  sentiment  of  the  old  English 
rhyme — 

A  little  stealing  is  a  dangerous  part; 
But  stealing  largely  is  a  noble  art. 
Tis  mean  to  rob  a  henroost  or  a  hen; 
But  stealing  millions  makes  us  gentlemen. 

A  powerful  financier,  plundering  mercilessly  but 
strictly  in  accordance  with  the  ethical  rules  of 
the  big  business  game ;  a  great  lawyer  upon  whom 
predatory  corporations  depend  to  pilot  them  safely 
into  an  easy-money  port;  a  popular  ecclesiastic 
dispensing  moral  privileges  to  those  who  get  much 


82  SOCIAL     SERVICE 

easy  money  and  have  it  in  abundance  to  give  for 
eleemosynary  purposes  not  interruptive  of  the 
game, — all  these  are  possibilities  with  that  boy. 
But  they  will  slip  from  him  if  his  moral  sense 
awakens.  An  awakened  moral  sense  is  the  worst 
of  all  obstacles  to  getting  easy  money  in  any  other 
than  the  natural  way,  the  way  that  necessitates 
the  giving  of  service  for  service. 

But  bless  me,  what  have  I  been  doing?  Here 
I  am  in  the  very  middle  of  the  pathology  of  social 
service,  and  I  didn't  intend  to  talk  much  about 
that  yet.  You  must  pardon  me,  Doctor;  I  was 
drawn  into  it  by  the  necessity  of  contrasting  the 
divergent  directions  of  human  action  under  the 
social  service  law  of  the  line  of  least  resistance. 
What  I  wished  to  impress  upon  you  was  this,  that 
it  is  in  conformity  to  this  same  law  of  human 
nature  which  I  have  distinguished  as  George's 
law,  that  one  man  gratifies  his  own  wants  by 
preying  upon  his  fellows,  while  another  does  it 
by  contributing  to  their  comfort;  that  one  is 
socially  disruptive  while  another  is  socially  co- 
operative. Pathological  social  conditions,  rather 
than  individual  wickedness,  seem  to  me  to  be 
most  at  fault  for  the  tendency  to  prey  and  disrupt, 
because,  as  I  see  it,  the  natural  tendency  of  man- 
kind under  the  influence  of  George's  law  is  not 
to  crime,  but  to  invention. 

The  same  desire  to  secure  the  most  money  with 
the  least  effort — which  means,  of  course,  the 
highest  degree  of  gratification  with  the  least  work ; 
for  money,  as  you  have  agreed,  is  only  a  certi- 
ficate of  title  to  the  gratifications  we  crave — this 
very  desire  which  in  pathological  social  conditions 
may  prompt  to  theft,  or  maintain  slavery,  or 
foster  monopolies,  leads  naturally  as  a  rule  to  the 
invention  of  labor-saving  methods  of  service.  By 
increasing  the  aggregate  of  wealth-producing  pow- 
er— that  is  to  say,  by  increasing  the  serviee-ren- 


INDIVIDUAL    SELF-SERVICE  83 

dering  power  of  each  individual  through  co-oper- 
ation with  others,  invention  emancipates  man- 
kind more  and  more  from  the  drudgery  of  satis- 
fying primary  bodily  needs.  And  as  it  does  this, 
there  come  demands  for  higher  satisfactions, 
which  in  turn  are  made  possible  by  further  in- 
vention. So  the  human  race  develops  as  a  co- 
operative whole,  and  we  have  an  expanding  civili- 
zation in  which,  while  self-service  is  the  continu- 
ous impulse,  social  service  is  the  continuous  re- 
sult. 

Did  you  ever  consider  how  tremendously  effec- 
tive self-service  has  been  in  promoting  social 
service,  notwithstanding  the  obstacles  that  deep- 
seated  pathological  conditions  actually  interpose? 
In  spite  of  these  adverse  conditions  the  desire  for 
self-service  has  strengthened  the  tendencies  that 
make  for  social  service  much  more,  relatively,  than 
those  that  make  for  its  disruption. 

Behold  the  intricate  and  beneficent  co-operation 
of  the  social  service  market  to  which  I  called  your 
attention  in  our  first  talk.  This  springs  from  in- 
vention, which  springs  from  co-operation,  which 
springs  from  the  natural  desire  for  self-service, 
the  natural  craving  for  easy  money.  Consider 
our  railroads,  our  telegraphs  and  telephones,  our 
factories  and  our  farm  machinery, — oh,  what's 
the  use  of  enumerating?  Give  your  imagination 
play  and  you  can  see  that  this  world  has  been  re- 
peatedly metamorphosed  into  what  a  little  while 
before  each  change  would  have  been  thought  of 
as  fairy  land.  Think  of  it  intensely,  as  it  is  at 
this  moment,  and  honestly  don't  you  seem  to  be  ia 
fairy  land?  Marvelous?  Marvelous  is  no  word 
for  it. 

You  say  it  is  machinery  that  does  it?  Yes, 
ao  long  as  men  continue  to  make  and  to  operate 
the  machinery.  But  back  of  the  machinery  is 
invention;  and  back  of  invention  is  human  co- 


84  SOCIAL     SERVICE 

operation;  and  back  of  all  is  the  self-serving 
impulse.  No,  not  back  in  point  of  time,  but  in 
point  of  natural  order.  The  desire  to  get  in  the 
easiest  way  the  service  of  others, — this  is  what 
prompts  co-operation,  which  produces  and  utilizes 
invention,  which  makes  the  civilization  in  which 
we  find  ourselves  today. 

The  more  you  think  of  it,  Doctor,  and  the 
more  critically  you  test  it,  the  surer  you  will  be 
that  the  primary  impulse  of  social  service  is  ex- 
pressed in  the  law  that  "men  seek  to  gratify  their 
desires  with  the  least  exertion."  It  is  a  sound 
sociological  principle,  a  true  perception  of  a  prim- 
ary law  of  human  conduct. 

Yes,  I  supposed  it  was  a  commonplace  to  you — 
this  idea  that  men  seek  to  serve  themselves  in  the 
easiest  way.  I  wasn't  expecting  to  startle  you 
with  news.  What  I  have  been  trying  to  do  is  to 
get  you  to  think  about  what  you  already  know.  I 
want  you  to  give  a  little  vitality  to  your  common- 
places. What  difference  does  it  make  how  com- 
monplace this  bit  of  psychology  is  to  you  if  it 
doesn't  affect  your  thinking? 

And  what  a  wonderful  commonplace  it  is,  isn't 
it?  It  is  all  a-thrill  with  vitality,  and  big  with 
meaning.  It  explains  the  interchanges  of  indi- 
vidual services  which  constitute  social  service; 
and  if  you  give  it  half  a  show,  Doctor,  it  will  ex- 
plain the  baffling  problem  of  our  time — the  prob- 
lem of  why  it  is  that  those  who  render  the  most 
service  to  others  get  the  least  service  in  return. 

Don't  believe  there  is  such  a  problem?  Well, 
we'll  talk  about  that  at  another  time;  it's  path- 
ological. Of  course  you  believe  it  was  so  in  the 
past,  and  you  see  the  reason  for  it  then.  Under 
despotic  institutions  those  who  gave  much  service 
for  little  were  forced  to  it ;  and  those  who  got  much 
service  for  little  or  none,  were  privileged  by  the 
despot  to  do  so.  Arbitrary  power  is  the  explanation 


INDIVIDUAL,     SELF-SERVICE  gg 

there.  But  in  a  country  like  ours,  where  there 
is  no  despotism,  how  shall  we  account  for  a  simi- 
lar unbalanced  state  of  the  interchanges  of  serv- 
ices— for  surely  you  will  admit  that  there  isn't 
exactly  a  square  deal  in  the  matter, — how  shall 
we  account  for  it,  I  ask,  in  these  free  conditions 
of  ours? 

The  key  to  the  problem  is  the  law  of  human 
nature  we  have  been  talking  about,  and  I  will  try 
to  help  you  out  with  it  some  time  if  you  don't  dis- 
cover the  solution  for  yourself.  Meanwhile  let's 
go  on  with  our  talk  on  the  normal  or  "healtho- 
logical"  effects  of  that  law  of  human  nature  in 
causing  co-operation. 

No,  Doctor,  I  mean  something  entirely  differ- 
ent from  what  is  in  your  mind.  We  have  had  co- 
operative societies  galore,  and  I  have  no  quarrel 
with  this  narrow  use  of  the  word.  If  a  lot  of 
people  who  organize  a  partnership  want  to  call  it 
a  co-operative  society,  and  to  speak  largely  and 
vaguely  about  it  as  "co-operation,"  why  let  them 
do  so,  of  course.  I  haven't  any  copyright  on  the 
word  "co-operation,"  nor  on  any  definition  of  it. 
But  I  guess  I've  as  good  a  right  to  use  the  word  to 
indicate  this  universal  and  spontaneous  partner- 
ship in  which  the  whole  civilized  world  is  en- 
gaged, as  a  coterie  of  dilettante  reformers  have 
to  monopolize  it  for  such  uses  as  small  partner- 
ships in  the  cracker  bakery  or  grocery  store  line. 
So,  mind  you,  when  I  say  "co-operation"  I  don't 
allude  to  profit-sharing  experiments,  but  to  the 
great  system  of  social  service  which  springs  nat- 
urally and  universally  from  individual  desires  for 
easy  self-service — that  comprehensive  partner- 
ship of  humanity  in  which  all  of  us,  except  as  we 
prey  upon  it,  are  necessarily  and  ntturally  part- 
ners. 

Imagination  will  hardly  let  us  think  of  a  time 
when  in  some  form  however  crude  and  to  some 


86  SOCIAL    SERVICE 

extent  however  slight,  this  co-operation  had  no 
existence;  that  is  to  say,  when  there  was  no 
specialization,  for  specialization  is  indispensable 
to  co-operation.  You  often  speak  of  specializing, 
Doctor,  but  I  suspect  that  you  seldom  if  ever  think 
of  the  thing  except  as  a  tendency  in  your  own 
profession.  Isn't  it  true  that  when  you  use  the 
word,  your  thought  centers  upon  the  custom 
among  physicians  of  devoting  themselves  to  this 
or  that  pathological  specialty?  or;  at  the  widest, 
of  students  taking  up  particular  branches  of  sci- 
entific inquiry?  I  thought  so.  But  in  the  sci- 
ence of  social  service  those  are  only  some  of  the 
directions  of  specialization.  The  term  itself  is 
vastly  more  comprehensive.  A  ditch  digger  or  a 
street  sweeper,  you  must  know,  is  a  specialist  as 
truly  as  a  surgeon  or  a  botanist.  Specialization 
is  only  another  term  for  what  business  men  call 
"division  of  labor." 

This  term  of  the  business  man — and  political 
economists  have  adopted  it — is  not  very  indica- 
tive, not  very  accurate.  It  doesn't  quite  express 
what  is  involved  in  co-operative  specialization ;  for 
this  implies  not  only  a  sort  of  division  of  service 
but  also  a  combination  of  service.  By  combina- 
tion of  service,  we  unite  our  respective  specialties 
so  as  to  produce  and  use  those  gigantic  structures 
that  defy  our  powers  as  individuals.  Think  of 
the  co-operative  union  of  specialized  knowledge 
and  effort  necessary  to  construct  an  ocean  grey- 
hound or  a  thirty  story  building,  a  railroad,  a 
farmer's  barn,  or  even  a  modest  cottage.  But 
by  division  of  service  we  separate  our  respective 
specialties,  so  as  to  accomplish  results  equally  gi- 
gantic in  the  aggregate  but  minute  in  their  sep- 
arable units,  as  when  the  letter  carrier,  the  ped- 
dler or  the  storekeeper  gathers  and  carries  for  us. 
We  unite  in  order  to  do  one  big  thing  which  none 
of  us  could  do  alone;  we  separate,  as  it  were,  in 


INDIVIDUAL     SELF-SERVICE  87 

order  to  do  many  little  things  which  it  would  be 
wasteful  of  time  and  energy  for  each  to  do  for 
himself.  In  the  one  case  we  turn  ourselves  into  a 
sort  of  social  "giant;"  in  the  other  we  each  di- 
vide ourselves  into  many  social  "pigmies."  But 
don't  fail  to  observe  that  in  both  cases  we  co- 
operate for  the  gratification  of  our  individual  de- 
sires. Whether  many  of  us  combine  in  order  to 
make  or  move  an  object  of  magnitude,  or  sepa- 
rate in  order  to  make  or  carry  small  objects  in 
abundance,  we  act  in  obedience  to  our  respective 
impulses  to  satisfy  our  own  wants  in  the  easiest 
way.  Serving  one  another  in  order  to  serve  our- 
selves the  easier,  we  generate  that  co-operation 
which  in  the  broadest,  truest,  and  only  enduring 
sense  is  social  service. 

Don't  you  see  it  ?  Think  a  bit.  When  yqu  and 
I  were  camping  one  Summer,  we  wanted  to  mail 
letters  home  at  the  post  office  two  miles  east  of  our 
camp.  You  recall  it,  don't  you?  We  also  want- 
ed some  of  that  live-bait  from  Spencer's  brook  two 
miles  west.  At  first  we  intended,  you  know,  to 
walk  together  to  the  post  office  and  then  to  Spen- 
cer's. The  companionship  would  have  been  agree- 
able, and  if  there  had  been  no  other  consideration 
that  is  doubtless  what  we  should  have  done.  But 
we  had  a  special  reason,  don't  you  remember,  one 
not  worth  recalling  now,  for  wanting  to  do  both 
of  those  errands  in  the  shortest  time  and  with  the 
least  bodily  exertion.  So  we  agreed  to  dispense 
for  a  spell  with  our  mutually  agreeable  compan- 
ionship in  order  to  accomplish  what  for  the  hour 
we  both  regarded  as  more  desirable.  Each  of  us 
divided  his  labor  "pigmy"  fashion.  I  went  to  the 
post  office  with  your  letters  as  well  as  my  own,  for 
two  sets  of  letters  didn't  burden  me  any  more  than 
one.  So  I  became,  don't  you  see,  like  two  pigmy 
servants — one  for  you  and  one  for  me.  On  the 
other  Band  you  brought  my  live-bait  as  well  as 


88  SOCIAL    SERVICE 

yours  from  Spencer's,  for  the  two  little  pails  were 
as  easy  to  carry  as  one  would  have  been;  at  least 
you  said  so,  and  I  saw  no  reason  to  object,  being 
a  little  rheumaticky  in  one  arm.  So  you  also  be- 
came like  two  pigmy  servants,  one  for  me  and  one 
for  you.  What  was  the  result?  Don't  you  see 
now  how  it  illustrates  the  effectiveness  of  division 
of  effort  in  social  service?  Why,  I  walked  only 
four  miles  to  and  from  the  post  office — two  miles 
each  way, — and  you  walked  only  the  same  dis- 
tance to  and  from  Spencer's  brook,  and  we  were 
gone  from  camp  only  an  hour  and  a  half ;  but  the 
letters  of  both  were  mailed,  and  the  live-bait  for 
both  was  got,  just  as  satisfactorily,  weren't  they? 
— as  if  each  of  us  had  mailed  his  own  letters 
and  got  his  own  bait  at  a  total  expenditure  in 
time  of  three  hours  instead  of  one-and-a-half,  and 
in  walking  of  eight  miles  each  instead  of  four. 
We  accomplished  these  economies  of  time  and  en- 
ergy by  specializing. 

The  only  difference  between  this  incident  and 
the  steady  flow  of  business  energy  in  the  social  serv- 
ice market  of  the  great  big  world,  is  that  you 
and  I  were  bent  on  pleasure,  and  but  for  the 
special,  reason  I  have  alluded  to,  might  have  pre- 
ferred to  take  more  time  and  to  walk  farther  for 
the  sake  of  companionship.  But  when  men  are 
engaged  in  business  instead  of  pleasure — that  is, 
when  they  are  bent  on  getting  social  service  for 
themselves,  or  what  will  amount  to  the  same  thing 
in  the  end,  are  bent  on  "making  money,"  as  they 
call  it, — the  element  of  choice  companionship 
drops  out.  They  do  small  services  in  this  way  ha- 
bitually, such  services  as  one  person  can  do  in  con- 
siderable number  at  once  as  easily  as  one  at  a 
time. 

Of  course  the  resulting  economy  is  vastly  greater 
than  in  our  post  office  and  live-bait  experience,  al- 
though the  principle  is  the  same.  Certainly  you 


INDIVIDUAL     SELF-SERVICE  89 

must  realize  that  the  economy  of  time  and  energy 
would  be  much  more  than  doubled  when  hundreds 
of  thousands  divide  their  labor  in  the  way  that 
you  and  I  did.  Even  in  our  camp,  if  there  had 
been  half  a  dozen  of  us  I  could  as  easily  have 
mailed  all  our  letters,  and  you  could  as  easily — 
not  quite,  perhaps,  but  pretty  near — have  brought 
live-bait  for  us  all;  and  that  would  have  left  the 
other  four  free  to  spend  the  hour-and-a-half  of 
our  absence  in  getting  dinner  for  us  all.  Our 
effectiveness  in  that  case  would  have  been  multi- 
plied six  times  instead  of  two  times.  For  if  each 
of  six  of  us  had  mailed  his  own  letters  and  got  his 
own  live-bait,  the  time  expended  would  have  been 
three  hours  each,  or  eighteen  for  the  six,  and  the 
walking  done  would  have  been  eight  miles  each, 
or  forty-eight  in  all.  But  by  division,  two  of  us 
would  have  done  it  all  just  as  well  with  an  aggre- 
gate expenditure  of  only  three  hours  in  time,  or 
one-and-a-half  each,  and  eight  miles  in  walking, 
or  four  miles  each. 

Eeflect  upon  this  a  little  and  you  will  get  a 
glimpse  of  the  effectiveness  of  co-operative 
service  in  economizing  time  and  energy  in  busi- 
ness pursuits,  and  thereby  creating  abundance  for 
all  concerned.  Don't  you  see  clearly  now  how 
this  co-operation,  these  habitual  interchanges  of 
services,  this  social  service  market  as  it  were, — 
don't  you  see  how  its  marvelous  effectiveness  may 
account  for  the  vast  gulf  that  lies  between  sav- 
agery, where  co-operation  is  simple  and  within 
narrow  bounds,  and  civilization,  where  it  is  com- 
plex and  world- wide?  Geometrical  progression 
isn't  in  it  with  economic  co-operation  for  produc- 
ing marvelous  results. 

Yes,  the  idea  of  community  of  goods  does  arise 
when  we  think  of  the  intricacy  of  co-operation. 
It  seems  as  though  everybody  engaged  in  produc- 
tive co-operation  must  share  in  the  results  of  the 


90  SOCIAL    SERVICE 

common  effort,  if  justice  be  done.  And  so  they 
must,  so  they  must.  But  not  arbitrarily.  The 
same  natural  laws  that  enhance  individual  powers 
when  co-operatively  expended,  provide  for  aug- 
menting individual  incomes  in  proportion  to  the 
expenditure  of  individual  effort.  An  "equal  di- 
vide" is  not  natural,  and  is  by  no  means  necessary. 
But  more  of  this  after  a  while.  For  the  present 
let's  consider  co-operation  by  combining  individ- 
ual efforts  instead  of  dividing  them — by  becoming 
parts  of  a  social  service  "giant,"  instead  of  turn- 
ing ourselves  individually  into  many  social  service 
"pigmies." 

Didn't  you  and  I  illustrate  the  "giant"  method 
pretty  well  when  we  first  went  camping  and 
wanted  a  comfortable  camping  cabin  instead  of 
putting  up  with  a  little  shelter  tent?  I  could 
have  made  a  kind  of  cabin,  and  so  could  you ;  but 
neither  of  us  unaided  could  have  made  as  good  a 
one  as  we  did  make.  To  speak  of  nothing  else, 
didn't  we  have  to  use  logs  that  neither  of  us  alone 
could  have  handled  ?  But  by  uniting  our  strength, 
by  making  of  ourselves  a  social  service  "giant" 
whose  power  was  more  than  double  the  solitary 
power  of  either  of  us,  we  managed  to  produce  a 
result  otherwise  impossible  to  us. 

Tn  this  case  we  shared  the  result  as  communists, 
using  in  common  the  one  cabin  of  our  co-operative 
making.  But  that  sort  of  thing  isn't  necessary. 
Such  results  can  be  shared  individually  with  equal 
if  not  more  perfect  justice  whenever  the  co-op- 
erators desire  it.  You  know  what  Perry  Lawson 
and  Silaa  Wilson  did  on  the  other  lake  last  Sum- 
mer. They  couldn't  share  a  cabin  in  common  as 
you  and  I  did,  for  they  had  their  wives  with  them. 
But  they  combined  their  building  energies  just 
as  you  and  I  did.  Of  course  they  had  to  work 
about  twice  as  long,  for  they  had  to  have  two 
cabins  instead  of  one;  but  don't  forget  as  we  go 


INDIVIDUAL,     SELF-SERVICE  91 

on  that  if  their  work  was  doubled  so  was  the  re- 
sult. They  had  twice  as  many  cabins  as  we  had. 
Now,  how  were  they  to  enjoy  the  benefit  of  each 
other's  work  in  building  those  cabins — how  with- 
out communism? 

Why,  Doctor,  you  know  that  Lawson  and  Wil- 
son don't  know  what  communism  is.  They  have 
never  heard  of  it  except  as  a  verbal  brickbat  for 
pelting  reformers  with  indiscriminately.  They 
didn't  try  to  avoid  it,  for  they  never  thought  of 
it.  But  they  did  avoid  it.  They  avoided  it  un- 
consciously. In  the  most  natural  way,  each  of 
them  got  the  benefit  individually  and  fairly  of 
their  co-operative  work  which  had  produced  two 
cabins,  both  alike  and  each  better  and  bigger  than 
either  Lawson  or  Wilson  could  have  built  alone. 
What  they  did  was  to  swap  cabins. 

Lawson  said:  "Here,  Silas,  give  me  your  un- 
divided half  interest  in  one  of  those  cabins,  and 
I'll  give  you  my  undivided  half  interest  in  the 
other."  "That's  all  right,  Perry,"  said  Silas. 
So  there  they  were,  each  with  a  cabin  he  couldn't 
have  built  alone,  yet  each  as  justly  and  truly  the 
individual  owner  of  that  cabin  as  if  he  alone  had 
built  it. 

You  may  not  have  noticed  it  in  the  case  of  our 
own  experience  in  swapping  letter-carrying  serv- 
ice for  live-bait  service,  but  the  principle  was  the 
same  as  in  the  case  of  the  Lawson  and  Wilson 
cabins.  I  carried  your  letters  as  compensation 
for  your  bringing  my  live-bait,  and  when  it  was 
all  over,  that  live-bait  was  just  as  fairly  my  in- 
dividual property  as  if  I  had  got  it  myself  and 
you  had  carried  your  own  letters. 

Now,  just  this  sort  of  thing  is  taking  place  all 
the  time  in  the  business  world,  only  on  a  vastly 
larger  scale,  more  systematically  and  with  prodi- 
gious complexity.  And  here  is  where  money  and 
the  terms  of  money  come  in.  When  you  and  I 


92  SOCIAL    SERVICE 

exchanged  bait-carrying  for  letter-carrying,  we 
didn't  need  money.  That  is  because  our  swap  was 
in  so  narrow  a  compass  and  so  extremely  simple 
and  complete  in  itself.  The  same  thing  was  true 
of  Lawson  and  Wilson  in  their  cabin  swap.  But 
when  the  swapping  is  so  intricate  that  no  one 
person's  service  fairly  offsets  another's,  and  so 
many  persons  are  involved  that  but  few  of  them 
know  each  other,  a  mode  of  measurement  and 
a  language  of  measurement  become  necessary.  Yet 
this  only  makes  a  difference  in  form  and  not  in 
essence. 

Something  that  Perry  Lawson  did  with  his 
cabin  the  other  day  illustrates  it.  I  guess  you 
don't  know  that  Lawson  has  sold  his  cabin? 
Well,  he  has,  and  this  is  the  way  of  it.  He  had 
told  Wilson  that  a  long  absence  from  the  country 
would  prevent  his  camping  for  several  years. 
"I'm  sorry,  Perry,"  said  Wilson,  "but  as  you  can't 
be  with  us  I  wish  you  would  sell  your  cabin  to  me, 
so  that  I  can  sell  it  to  some  agreeable  fellow." 
The  generous  thing  for  Lawson  would  have  been, 
I  suppose,  to  give  his  cabin  to  Mrs.  Wilson;  but 
if  he  had  done  that  my  illustration  would  have 
been  spoiled,  and  for  a  fact  he  did  sell  it  to  his 
friend  Silas.  But  Silas  hadn't  anything  to  offer 
in  pay  in  the  way  of  his  own  service  which  Perry 
wanted,  so  they  fixed  a  price  in  money.  It  was 
satisfactory  to  both — ten  dollars,  I  think  it  was — 
and  Wilson  paid  it. 

Now  what  does  that  mean?  Why,  simply  that 
Silas  Wilson  gave  to  Perry  Lawson  a  token  where- 
by he  can  get  anybody's  service,  anywhere,  when- 
ever he  wants  to,  and  in  any  quantity  and  variety 
he  pleases,  up  to  ten  dollars'  worth;  and 
that  Silas  Wilson  has  either  given  his  own  service 
to  one  or  more  persons  to  the  same  value,  or  will 
do  so,  or  else  that  he  will,  somehow  or  other, 
legally  or  illegally,  reputably  or  disreputably, 


INDIVIDUAL,     SELF-SERVICE  93 

screw  some  other  person  or  persons  out  of  their 
service  to  that  value. 

Multiply  that  transaction,  then,  by  millions, 
and  divide  it  intricately  into  all  sorts  of  frac- 
tional parts,  and  you  will  have  an  indication  of 
what  is  going  on  all  the  time  in  the  business 
world.  Partly  by  means  of  the  actual  use  of 
money  tokens,  but  chiefly  by  means  of  book  ac- 
counts, and  of  checks,  drafts  and  notes,  individual 
titles  to  shares  in  social  services  are  being  trans- 
ferred from  one  of  us  to  another  all  over  the 
world,  in  principle  precisely  the  same  as  Lawson 
transferred  to  Wilson  the  title  to  his  cabin. 

It  is  this  transference  of  title  to  social  service 
that  makes  co-operation  possible.  Moved  by  his 
own  desires  for  the  most  service  with  the  least  ef- 
fort, each  individual  voluntarily  exerts  his  own 
energy  to  aid  in  satisfying  in  some  degree  the  de- 
sires of  others.  In  exchange  for  what  he  does  he 
receives  money,  or  credit  in  terms  of  money, 
which  puts  him  in  position  to  gratify  the  desires 
that  moved  him.  He  works  at  his  own  specialty, 
doing  over  and  over  again  the  same  thing,  for 
whom  he  knows  not,  a  thing  as  useless  in  itself 
it  may  be  as  a  shoe  sole  or  a  shirt  button;  and 
through  a  myriad  exchanges  accomplished  by 
means  of  money  or  in  the  language  of  money, 
some  of  the  service  that  he  renders  comes  in  some 
form  to  you  or  me,  let  us  say,  in  exchange  for 
some  service  that  we  render.  Our  individual 
services,  yours  or  mine,  may  never  reach  him  at 
all,  though  his  reach  you  or  me;  but  somebody 
else's  will  reach  him,  in  exchange  for  yours  or 
mine,  if  things  work  out  normally — that  is  if 
there  is  nothing  pathological  in  our  social  condi- 
tions,— and  directly  and  indirectly,  somewhere 
and  somehow  in  the  labyrinths  of  the  social  serv- 
ice market,  my  services  or  yours  will  square  ac- 
counts with  his, 


94  SOCIAL    SERVICE 

In  the  grand  round-up  of  social  service  every 
fellow  in  the  world  who  pays  his  way,  squares 
accounts  in  services  of  his  own  with  every  other 
fellow  whose  services  he  enjoys.  Farmers  work 
to  supply  the  social  service  market  with  grain, 
millers  with  flour,  bakers  with  bread ;  and  each  is 
helped  by  the  work  of  railroad  men,  of  store- 
keepers, of  truckmen,  of  coal  miners,  of  machin- 
ists, of  builders,  and  so  on, — an  interminable  cata- 
logue. They  are  all  making  bread.  Then,  again, 
a  vast  variety  of  workers  in  like  manner  supply 
the  social  service  market  with  clothing,  and  an- 
other with  dwellings,  while  others  work  profes- 
sionally or  otherwise  in  rendering  direct  service 
without  making  commodities — such  as  doctors, 
lawyers,  teachers,  actors,  household  servants  and 
clergymen.  Each  person  works  at  one  kind  of  em- 
ployment in  which  he  acquires  special  skill,  or  it 
may  be  in  only  one  department  or  subdivision  of 
employment.  He  may  repeatedly  make  only  the 
smallest  part  of  a  complete  thing,  such  as  a  shoe- 
sole.  But  be  his  particular  work  what  it  may  be, 
he  trades  it — possibly  through  a  bewildering  maze 
of  exchanges  which  his  mind  does  not  and  cannot 
follow — for  the  work  of  other  social  servitors. 

One  man,  for  instance,  makes  shoe-soles,  noth- 
ing but  shoe-soles,  from  week's  end  to  week's  end, 
thereby  helping  to  satisfy  individual  desires  for 
shoes.  He  does  it  on  condition  that  somehow  and 
some  way,  other  social  servitors  shall  satisfy  his 
desire  for  food  and  clothing  and  shelter  and  lux- 
uries and  so  on,  including  shoes.  At  pay  day  he 
says  to  his  boss:  "Here,  give  me  the  money  you 
agreed  upen,  and  I  relinquish  my  undivided  in- 
terest in  those  shoe-soles  to  you."  Getting  the 
money,  this  maker  of  shoe-soles  may  pay  an  in- 
stallment on  a  suit  of  clothes,  or  a  house,  or  ma- 
chinery of  some  kind ;  or  he  may  buy  in  whole  or 
part  something  else  that  he  couldn't  possibly  have 


INDIVIDUAL    SELF-SERVICE  95 

made  himself.  Yet  the  thing  he  buys  with  that 
money  is  as  truly  his  as  if  he  had  made  it  himself. 
All  the  original  makers  have  sold  their  undivided 
interests  in  it  for  other  services,  until  the  com- 
plete title  comes  to  our  shoe-sole  maker  in  ex- 
change for  his  work  at  cutting  shoe-soles.  The 
transaction  is  precisely  like  the  Lawson  and  Wil- 
son affair. 

What  is  that  you  say?  The  sole-maker  doesn't 
get  as  much  money  as  he  ought  to  get,  can't  buy 
as  much  clothing  or  house  or  machine  as  he  has 
earned  at  making  shoe-soles?  That  may  be  so, 
and  I  guess  it  is;  anyhow  I  won't  dispute  you. 
But  if  it  is  so,  the  reason  is  that  there  is  some- 
thing wrong  in  the  social  service  market — some- 
thing that  prevents  its  working  normally;  and 
that  is  a  consideration  that  belongs  to  the  pathol- 
ogy of  the  subject.  But  if  the  social  service  mar- 
ket is  not  deranged,  that  sole-maker  will  get  what 
his  work  is  worth.  He  wouldn't  sell  his  interest 
in  the  soles  for  less  than  it  was  worth  if  there 
were  no  coercion  and  he  were  free  to  swap  or  not, 
as  every  one  must  be  when  the  social  service  mar- 
ket is  normal. 

What  I  want  to  get  at  now,  however,  is  the  fact 
that  the  clothing,  the  machine,  the  house  or  what 
not  which  the  sole-maker  buys  with  the  money  he 
gets  for  shoe-soles,  is  just  as  truly  his  own  cloth- 
ing, house  or  machine,  OP  what  you  will,  as  if  he 
had  done  the  impossible  thing  of  making  it  from 
start  to  finish  all  by  himself.  It  is  just  as  truly 
his  own  as  that  live-bait  you  fetched  for  me  in 
consideration  of  my  carrying  those  letters  for  you, 
was  my  live-bait;  just  as  truly  his  own  as  those 
two  cabins  which  Lawson  and  Wilson  made  were 
Wilson's  and  Lawson's  individual  property  re- 
spectively, after  each  had  swapped  his  undivided 
interest  in  one  for  his  companion's  undivided  in- 
terest in  the  other. 


96 

Individual  distribution  of  results,  fairly  in  pro- 
portion to  service,  is  part  of  the  process  of  co-op- 
eration— a  necessary  part, — of  the  co-operation,  I 
mean,  that  constitutes  human  society.  This  co- 
operation has  the  two  modes  I  have  illustrated — 
"pigmy"  co-operation  through  the  doing  by  the  in- 
dividual of  many  things  within  his  own  powers, 
and  "giant"  co-operation  through  contributions  by 
him  to  the  doing  of  things  beyond  his  own  powers. 
Although  distinguishable  in  principle,  these  two 
modes  merge  in  practice  on  a  large  scale.  The 
"pigmy"  mode  then  utilizes  the  "giant"  mode,  as, 
for  instance,  letter-carriers  utilize  the  railroad 
and  the  steamship.  Without  these  modes  of  co- 
operation we  should  not  be  able  with  all  our  num- 
bers to  do  more  than  a  naked  savage  solitary  upon 
an  island  could  do.  But  with  them,  the  power  of 
each  individual  is  incalculably  multiplied,  his 
knowledge  extended,  his  wants  increased,  his 
ideals  exalted.  Thus  is  civilized  society,  frater- 
nal and  altruistic  society,  maintained  and  pro- 
moted. But  don't  forget  that  co-operation  re- 
quires for  its  perfect  work  in  this  respect,  a  fair 
distribution  of  results  among  individuals  in  pro- 
portion to  individual  service. 

"Society  in  its  most  highly  developed  form  is 
an  elaboration  of  society  in  its  rudest  beginnings." 
That  is  what  George  says,  and  don't  you  see  he  is 
right?  If  he  seems  to  be  mistaken,  it  is  only,  as 
he  says,  "that  principles  obvious  in  the  simplest 
relations  of  men  are  merely  disguised  and  not  ab- 
rogated or  severed  by  the  more  intimate  relations 
that  result  from  the  division  of  labor  and  the  use 
of  complex  tools  and  methods."  Don't  you  see 
with  him  that  "the  steam  grist  mill,  with  its  com- 
plicated machinery  exhibiting  every  diversity  of 
motion,  is  simply  what  the  rude  stone  mortar  dug 
up  from  an  ancient  river  bed  was  in  its  day — an 
instrument  for  grinding  corn;"  and  that  "every 


INDIVIDUAL,     SELF-SERVICE  97 

man  engaged  in  it,  whether  tossing  wood  into  the 
furnace,  running  the  engine,  dressing  stones, 
printing  labels  or  keeping  books,  is  really  devoting 
his  labor  to  the  same  purpose  that  the  prehistoric 
savage  did  when  he  used  his  mortar — the  prepara- 
tion of  grain  for  human  food"?  And  isn't  it  as 
true  of  the  mechanics  who  make  the  machinery, 
of  the  miners  and  lumbermen  who  produce  the 
material  for  the  machinery,  of  the  miners  and 
lumbermen  who  produce  the.  material  with  which 
the  machinery  for  making  that  machinery  is 
made,  and  of  the  mechanics  who  make  it,  and  of 
all  the  transporters  and  storekeepers  and  book- 
keepers and  engineers  and  draftsmen  and  other 
workers?  Aren't  they  all  co-operating  to  turn 
the  farmer's  grain  into  flour  for  the  baker's  oven  ? 
— aren't  they  all  co-operating  to  make  bread? 
And  isn't  each  doing  his  part  of  this  co-operation 
for  the  purpose  of  securing  the  satisfaction  of  his 
own  desires  in  the  easiest  way? 

What  other  motive  could  there  be?  What  con- 
ceivable motive  but  this  would  keep  armies  of  men 
at  work  in  the  exchanging  of  social  service  every 
day  and  all  through  life?  With  the  money  each 
gets  for  his  work — tokens  of  the  value  of  the  work 
he  has  done — he  buys  the  things  he  wants,  the 
things  he  really  worked  for.  To  the  extent  that 
he  buys  bread,  it  was  for  bread  that  he  worked. 
To  the  extent  that  he  buys  other  things,  it  was 
for  them  that  he  worked.  His  motive  doesn't 
differ  essentially  from  that  of  his  ancestors  who 
dug  clams  for  themselves  on  the  shores  of  the  sea. 

But  through  combination  and  division  of  effort, 
which  enormously  multiply  human  power,  not 
alone  by  the  economies  of  time  and  energy  that 
result  immediately,  but  also  from  the  labor-saving 
machinery  and  methods  which  co-operation  in- 
creasingly demands  and  human  inventiveness  in- 
creasingly supplies,  the  self-serving  motive  of  the 


98  SOCIAL     SERVICE 

primitive  clam-digger  has  developed  an  intricate 
labyrinth  of  self-serving  motives  which  vitalize  the 
world  of  social  service  and  give  us  civilization. 
Human  society  is  in  truth  a  complex  social-service 
mart.  Here  we  trade  services  with  one  another 
by  means  of  money  or  in  the  terms  of  money. 
Through  this  trading,  productive  power  is  multi- 
plied, and  knowledge  and  skill  are  acquired,  and 
thereby  each  person,  with  no  more  exertion  than 
would  yield  the  savage  a  coarse  meal,  may  enjoy 
the  comforts  of  civilized  life. 

But  don't  forget,  my  dear  Doctor,  that  the  so- 
cial service  mart  is  no  arbitrary  or  prearranged 
device.  Society  doesn't  artificially  organize  co- 
operation; on  the  contrary,  this  co-operative  force 
naturally  organizes  society.  It  makes  society  like 
an  organism.  Consequently  society  is  a  natural 
evolution. 

The  desire  to  economize  effort  being  natural 
to  individual  men,  the  economizing  instinct  of 
trade  is  also  natural  to  them,  and  this  is  to  society 
what  the  life  principle  is  to  the  individual.  It 
endows  society  with  its  character  of  an  organic 
combination,  instead  of  leaving  it  a  loose  aggre- 
gation of  individual  units.  It  is  something  that 
develops  society,  not  through  conscious  organiza- 
tion but  by  unconscious  growth.  To  eradicate  it 
from  human  nature,  if  that  were  possible,  would 
be  to  destroy  society;  and  in  analogy  with  all 
other  kinds  of  organic  growth,  to  interfere  with 
its  full  expression  is  to  generate  social  disease. 
But  to  protect  it  from  conditions  inimical  to  its 
normal  processes,  to  guard  exchanges  of  social 
service  from  .obstruction  and  diversion,  is  to  clear 
the  way  for  society  to  attain  almost  to  supernal 
heights  of  civilization. 

Do  you  understand  now  what  I  meant  by  in- 
sisting that  individual  desires  to  get  the  most 
service  with  the  least  effort — the  universal  desire 


INDIVIDUAL     SELF-SERVICE  99 

for  easy  money — promotes  civilization?  I  noticed 
that  you  shook  your  head  when  I  said  it.  But 
isn't  it  true  ?  Normally,  I  mean ;  normally.  Not 
pathologically,  of  course.  I  have  to  recur  often 
to  the  pathology  of  the  subject  because  we  are  so 
prone  to  confuse  pathological  with  normal  condi- 
tions in  our  thinking,  forgetting  that  it  is  health 
and  not  disease  that  is  natural. 

In  diseased  conditions  of  the  social  organism, 
the  desire  to  get  the  most  service  with  the  least 
effort,  has  for  its  correlative  the  desire  to  make 
others  get  along  with  the  least  service  for  the  most 
effort.  It  is  one  thing  for  us  to  get  most  serv- 
ice for  least  service,  and  a  very  different  thing  to 
get  most  service  with  least  effort. 

Note  the  difference.  The  criminal,  and  the 
grafter  whether  criminal  or  not — they  seek  the 
most  service  from  others  for  the  least  service  to 
others.  In  their  case  the  self-serving  impulse  is 
unsocial.  It  tends  to  disrupt  co-operation.  But 
— well,  take  the  inventor  for  an  illustration, — his 
moving  desire  is  to  discover  ways  of  obtaining  the 
most  service  with  the  least  effort.  That  is  social, 
that  is  co-operative.  If  the  self-serving  impulses 
lead,  without  personal  criminality,  to  the  actual 
extortion  of  much  service  for  little  or  no  service, 
we  are  apprised  of  pathological  social  symptoms. 
Perhaps  we  shall  catch  glimpses  of  something  of 
the  sort  if  we  conclude  to  talk  about  the  mechan- 
ism of  business.  But  to  the  extent  that  the  self- 
serving  impulse  leads  to  the  utilization  of  methods 
for  enabling  all  to  get  more  social  service  for  less 
individual  effort— of  enabling  all,  mind  you, — to 
that  extent  we  are  in  the  stream  of  progress 
through  the  development  of  natural  co-operation. 


CHAPTER  V. 
Demand  and  Supply. 

You  contracted  your  brows  a  little,  Doctor, 
when  I  said  that  individuals  virtually  make  the 
things  they  buy  with  the  money  they  earn.  But 
really  nothing  could  be  truer,  I  do  assure 
you.  Let  people  stop  buying  some  commodity, 
any  artificial  commodity  you  can  think  of,  I  don't 
care  what,  from  pins  to  poignards,  and  woudn't 
that  commodity  disappear  from  the  face  of  the 
earth?  So  much  of  it  as  had  been  made  in  ex- 
pectation of  purchases,  would  linger  awhile  no 
doubt,  but  its  reproduction  would  stop  almost 
upon  the  instant.  Who  causes  it  to  exist,  then, 
but  those  who  demand  it  and  give  service  in  ex- 
change for  it? 

Take  our  shoe-sole  maker,  for  instance,  he  of 
whom  we  spoke  a  few  days  ago.  Suppose  he 
spends  the  money  he  gets  for  making  shoe  soles  in 
buying  a  coat,  hasn't  he  virtually  caused  coats  to 
be  made?  Think  of  it  a  moment;  analyze  the 
circumstances.  He  has  made  shoe  soles  that  he 
doesn't  want  and  wouldn't  make  for  himself,  but 
which  other  folks  do  want  and  for  which  they 
give  money  to  his  employer,  who  gives  some  of  it 
to  him ;  and  he  spends  this  money  for  a  coat  which 
a  lot  of  folks  within  the  circles  of  social  service 
have  made  although  they  didn't  want  it  and 
wouldn't  have  made  it  if  they  hadn't  expected  to 
sell  it.  They  may  not  know  him  nor  he  them. 
They  may  have  in  mind  no  particular  user  of  that 
particular  coat  when  they  make  it,  any  more  than 


DEMAND  AND  SUPPLY.  101 

he  has  in  mind  a  particular  shoe  wearer  when 
he  makes  a  particular  shoe  sole.  But  just  as  he 
makes  shoe  soles  because  there  is  a  general  de- 
mand for  shoes,  so  they  make  coats  because  there 
is  a  general  demand  for  coats.  And  isn't  he,  as 
the  buyer  of  one  coat,  a  factor  in  that  general 
demand  for  coats?  Surely  it  is  the  sole  maker 
who  really  employs  coat  makers  to  the  extent  of 
one  coat,  just  as  it  is  shoe  wearers  who  really  em- 
ploy sole  makers.  But  for  the  demand  of  sole 
makers  for  coats  there  would  be  fewer  coats;  but 
for  the  demand  of  coat  makers  for  shoes  there 
would  be  fewer  shoes ;  but  for  general  demand  for 
things  in  general,  whatever  you  will,  there  would 
be  fewer  of  those  things.  In  reality  every  one 
who  does  what  others  want  done  is  employing 
others  to  do  what  he  wants  done.  And  so  it  goes 
all  through  the  confusing  mazes  of  that  co-opera- 
tive concern  which  we  distinguish  as  the  social 
service  market. 

You  have  often  heard  business  men  compliment 
themselves  upon  "giving  work."  But  if  there  ia 
any  credit  coming  to  persons  who  "give  work,"  it 
doesn't  belong  to  employers.  They  are  only  co- 
operators  with  their  help.  The  persons  who  give 
work  both  to  an  employer  and  to  his  hands,  are  the 
consumers  of  his  goods.  If  they  stopped  con- 
suming to-day,  your  benevolent  employer  would 
have  to  stop  "giving  work"  to-morrow.  It  is  their 
desire  for  consumption  that  causes  their  demand, 
and  their  demand  that  sets  in  motion  and  keeps 
in  motion  the  processes  of  supply. 

Don't  you  catch  on  to  the  principle  of  the 
thing?  Each  of  us  makes  what  he  can  make  the 
better,  in  order  to  get  money  for  it  with  which 
to  buy  what  he  wants  the  more.  We  specialize, 
not  because  we  want  all  the  products  of  our  own 
specialty,  nor  indeed  more  than  a  very  small  part; 
but  because  we  wish  to  put  into  the  social  serv- 


102  SOCIAL    SERVICE 

ice  market  our  products  that  we  don't  want,  in 
exchange  for  the  products  of  other  specialists 
which  we  do  want.  Don't  you  see,  then,  that  what 
we  are  really  doing,  when  you  consider  the  great 
round-up  of  exchanges,  is  hiring  one  another? 

Well,  if  we  hire  one  another,  don't  we  virtually 
make  the  products  of  other  specialists  which  we 
buy,  and  don't  they  virtually  make  our  products 
which  they  buy?  Wasn't  our  old  printer  friend — 
"Bill"  McCabe  as  we  used  to  call  him, — wasn't  he 
right  when  he  was  building  that  little  house  of 
his  away  back  in  the  '80s,  and  you  and  I  advised 
him  to  dig  the  cellar  himself,  wasn't  he  right 
when  he  replied  that  he  could  dig  that  cellar 
easier  with  a  printer's  composing  stick  than 
with  a  pick  and  shovel?  We  didn't  understand 
him  until  he  explained  that  he  meant  to  earn 
money  with  his  composing  stick  as  a  printer,  a 
kind  of  work  he  was  skilled  in,  and  then  to  hire 
with  that  money  men  skilled  with  pick  and  shovel 
to  dig  him  his  cellar.  Of  course  he  could  dig 
it  that  way  easier,  and  that  is  why  he  did  it  so; 
and  of  course  he  virtually  dug  it  himself  by  sell- 
ing the  type-setting  and  buying  the  cellar-digging. 
Didn't  you  virtually  carry  your  own  letters  and  I 
my  own  live-bait,  that  time  in  the  mountains? 
It's  the  same  thing. 

Business  men  look  at  it  that  way  anyhow.  When 
they  pay  wages  for  the  products  of  a  specialist 
they  employ — our  friend  the  shoe-sole  maker,  for 
instance, — don't  they  say,  Our  house  made  those 
products?  By  "our  house"  they  mean  themselves 
as  "employers  of  labor."  And  as  between  them- 
selves and  their  workmen  they  are  right,  for 
workmen  do  produce  in  response  to  the  demands 
of  their  employers.  But  as  between  themselves 
and  their  workmen  on  one  side,  and  the  consum- 
ers of  the  products  on  the  other,  the  products  are 
made  in  response  to  the  demands  of  the  con- 


DEMAND     AND     SUPPLY  103 

sumers.  It  is  the  consumers,  therefore,  who,  in 
the  last  analysis,  make  the  products,  in  the  busi- 
ness man's  sense  of  causing  them  to  be  made — 
provided,  of  course,  that  the  consumers  earn  the 
money  with  which  they  buy  them.  If  they  don't 
earn  the  money,  then  they  don't  make  the  prod- 
ucts that  they  demand,  for  they  give  no  service 
in  exchange  for  them.  Though  they  cause  the 
products  they  buy  to  be  made,  it  is  only  as  a  slave- 
owner or  a  confidence  man  may  do  so,  unless  they 
make  what  they  buy  with. 

Why,  now  I  recall  it,  we  have  a  lawyer's  maxim 
which  is  right  in  point.  "Qui  facit  per  alium 
facit  per  se" — he  who  acts  through  another  acts 
through  himself.  Would  it  be  too  loose  an  inter- 
pretation of  that  maxim  to  say  that  what  one 
does  by  another  he  does  himself  ?  This  is  a  whole- 
some legal  rule,  as  sound  as  a  nut,  and  I  take  it 
to  be  as  sound  in  the  science  of  social  service  aa 
in  the  law.  Every  legitimate  exchange  of  service 
is  a  case  of  reciprocal  hiring;  and  each  social 
servitor,  by  inducing  others  to  produce  the  things 
that  he  demands  in  exchange  for  what  he  pro- 
duces, himself  produces  in  effect  what  he  demands. 

The  importance  of  the  principle  will  reveal  it- 
self to  you,  Doctor,  if  you  bring  it  to  bear  upon 
such  pathological  aspects  of  social  service  as  the 
conjunction  of  unsatisfied  wants  and  slack  em- 
ployment. But  don't  let  me  side-track  myself. 
Before  passing  on  from  the  principle  that  the 
working  consumer  virtually  produces  the  things 
he  demands  for  consumption,  I  want  to  call  your 
attention  to  an  eloquent  illustration  that  Henry 
George  made  of  the  same  principle.  When  I  first 
read  it  in  "Progress  and  Poverty"  the  thought 
and  the  diction  made  such  an  impression  on  me 
that  I  have  never  forgotten  the  passage.  Listen: 
"The  draftsman  who,  shut  up  in  some  dingy  of- 
fice on  tjie  banks  of  the  Thames,  is  drawing  the 


104  SOCIAL     SERVICE 

plans  for  a  great  marine  engine,  is  in  reality 
devoting  his  labor  to  the  production  of  bread  and 
meat  as  truly  as  though  he  were  garnering  the 
grain  in  California  or  swinging  a  lariat  on  a  La 
Plata  pampa;  as  truly  making  his  own  clothing 
as  though  he  were  shearing  sheep  in  Australia  or 
weaving  cloth  in  Paisley,  and  just  as  effectively 
producing  the  claret  he  drinks  at  dinner  as  though 
he  gathered  the  grapes  on  the  banks  of  the  Ga- 
ronne. The  miner  who,  two  thousand  feet  under- 
ground in  the  heart  of  the  Comstock  is  digging 
out  silver  ore,  is,  in  effect,  by  virtue  of  a  thous- 
and exchanges,  harvesting  crops  in  villages  five 
thousand  feet  nearer  the  earth's  center;  chasing 
the  whale  through  arctic  icefields ;  plucking  tobac- 
co leaves  in  Virginia;  picking  coffee  berries  in 
Honduras;  cutting  sugar  cane  on  the  Hawaiian 
Islands;  gathering  cotton  in  Georgia  or  weaving 
it  in  Manchester  or  Lowell;  making  quaint  wood- 
en toys  for  his  children  in  the  Hartz  Mountains ; 
or  plucking  amid  the  green  and  gold  of  Los 
Angeles  orchards  the  oranges  which,  when  his 
shift  is  relieved,  he  will  take  home  to  his  sick 
wife." 

You  won't  be  so  literal,  I  take  it,  as  to  con- 
strue that  passage  into  an  absurd  assertion  that 
a  Rocky  Mountain  miner  raises  oranges  for  his 
sick  wife  by  directly  availing  himself  of  the  phy- 
sical laws  of  orange  culture.  Those  laws  he 
leaves  to  the  orange  specialists.  The  law  of  orange 
culture  that  he  does  avail  himself  of,  whether  con- 
sciously or  not,  is  the  great  psychological  law  of 
social  service  which  I  have  already  alluded  to, — 
that  demand  regulates  supply.  Finding  that  there 
is  a  demand  for  silver  ore,  the  miner  supplies  sil- 
ver ore  by  digging  it;  and  getting  money  for  this 
work,  he  spends  the  money  for  oranges,  an  act 
which,  in  conjunction  with  millions  like  it,  yes- 
terday, to-day,  and  probably  to-morrow — past, 


DEMAND     AND     SUPPLY  105 

present  and  future, — goes  to  make  up  an  aggre- 
gate demand  for  oranges  to  which  the  orange  spe- 
cialist responds  as  the  miner  did  to  the  aggregate 
demand  for  silver  ore. 

This  is  the  law  of  supply  and  demand.  It  is 
what  holds  the  social  service  market  in  equili- 
brium. We  may  state  it  in  various  forms,  one  of 
which,  the  form  that  Henry  George  prescribed,  is 
like  this:  "The  demand  for  consumption  deter- 
mines the  direction  in  which  labor  will  be  expend- 
ed in  production.*  But  we  can  shorten  that  form 
by  saying  that  demand  determines  supply;  or, 
and  probably  this  is  the  better  form  for  our  pres- 
ent purpose,  that  the  demand  for  social  service 
determines  the  direction  of  individual  services. 
In  the  language  of  money,  the  law  might  be 
translated  into  this  formula:  The  expenditure  of 
money  in  purchasing  products  for  consumption, 
determines  the  expenditure  of  money  in  purchas- 
ing services  for  production. 

With  all  due  deference,  Doctor,  to  your  dis- 
taste for  the  absolute,  I  am  obliged  to  say  that 
this  is  a  natural  law,  a  law  of  human  nature  as 
invariable,  taking  human  nature  in  the  mass,  as 
the  most  rigid  physical  law  that  you  find  it  neces- 
sary to  yield  your  empirical  prejudices  to.  The 
character  and  volume  of  the  demand  for  social 
service  persistently  tend  to  determine  the  char- 
acter and  volume  of  the  supply  of  individual  serv- 
ices. If  not  obstructed,  this  tendency  will  pro- 
duce a  constant  equilibrium  of  demand  and  sup- 
ply. There  is  plenty  of  proof  for  this  conclusion, 
and  there  is  no  escape  from  it. 

Isn't  the  principle  perfectly  obvious  in  the 
case  of  a  solitary  man  who  has  to  supply  the 
satisfactions  for  his  own  demands  directly  with 
his  own  services — a  man  who  has  no  fellows  to 

•"Progress  and  Poverty,"  pa*e  76.  Library  edition. 


106  SOCIAL    SERVICE 

| 

co-operate  with,  and  consequently  no  use  for 
money?  Look  at  Eobinson  Crusoe,  for  example. 
Within  his  powers  he  supplied  himself  with  serv- 
ice in  response  to  his  demand  for  service,  and 
only  so.  If  Defoe  had  made  him  any  other  way, 
every  boy  that  reads  the  story  would  cry  out 
against  it.  Demanding  goat's  flesh,  he  caught  and 
killed  goats.  Demanding  corn,  he  cultivated 
corn.  Demanding  shelter,  he  fixed  his  cave  and 
built  his  hut.  Even  upon  goods  he  found  in 
stranded  ships,  he  was  obliged  to  render  service 
to  himself  in  the  direction  of  his  demand  for  serv- 
ice, by  preparing  places  for  safe-keeping  and  in 
fetching  the  goods  there.  Nothing  came  to  him 
without  his  laLor.  And  wasn't  the  labor  he  expend- 
ed in  any  direction,  turned  in  that  direction  by  his 
desire  for  what  labor  so  exerted  would  produce  to 
him?  Clearly  it  was  Eobinson  Crusoe's  demand 
for  service  that  determined  his  labor  in  supplying 
service. 

Well,  now,  Crusoe  is  a  type  of  society.  For 
society,  taken  as  a  whole,  is  but  a  larger  man  liv- 
ing upon  a  larger  island  in  space  as  Crusoe  lived 
upon  his  little  island  in  the  sea.  The  principle  of 
supply  and  demand  may  not  be  so  clear  in  the  larg- 
er man  of  our  planet  whom  we  call  Human  Society, 
as  with  Crusoe  in  his  solitary  condition,  since  in- 
dividuals do  not  themselves  perform  the  identical 
services  which  they  desire  for  themselves.  But 
it  is  operative  all  the  same.  One  man  supplies  a 
great  deal  of  one  kind  of  service,  while  he  de- 
mands in  return  a  little  of  almost  every  kind. 
You  see  that,  Doctor?  But  why  does  he  supply 
any  particular  kind  of  service?  why  not  some 
other  kind?  Isn't  it  because  he  thinks  there  is 
a  demand  for  the  kind  he  supplies,  which  will 
enable  him  to  swap  it  for  the  kinds  he  de- 
mands ? 

If  hat  makers  demand  shoes,  coats  and  food; 


DEMAND     AND     SUPPLY  101 

and  shoemakers  demand  hats,  coats  and  food ;  and 
tailors  demand  hats,  shoes  and  food ;  and  food  ma- 
kers demand  hats,  shoes  and  coats — each  co-oper- 
ator in  each  of  these  industrial  classes  will  re- 
spond to  the  demands  of  all  the  others.  As  may 
be  the  demand  among  them  for  service  in  the 
concrete  form  of  hats,  shoes,  coats  and  food,  BO 
will  their  labor  respectively  be  expended.  And  if 
demand  for  one  of  these  objects  should  rise  or 
fall  relatively  to  demand  for  the  others,  more  or 
less  of  their  labor,  as  the  case  may  be,  will  turn 
to  the  production  of  that  object. 

Don't  you  remember  how  Abe  Remer,  when  we 
were  boys  together,  used  to  do  carpenter  work 
out  our  way  part  of  the  year,  and  work  at  lay- 
ing stone  or  other  odds  and  ends  of  service  at 
other  times?  A  carpenter  by  trade,  why  did  he 
stop  carpentering  "now  and  then,  to  work  at  other 
jobs?  Because  carpenter  work  fell  off  at  some 
seasons  of  the  year,  and  other  jobs  were  more 
profitable.  The  demand  for  service  regulated  the 
supply  of  service  in  his  case  sure  enough.  And 
it  is  so  in  general.  Should  demand  for  any  kind 
of  service  wholly  cease,  men  would  discontinue 
its  supply  altogether.  This  effect  may  be  observed 
whenever  a  class  of  goods  goes  out  of  fashion. 
Should  such  goods  come  again  into  fashion,  de- 
mand for  them  would  be  renewed,  and  with  the 
reappearance  of  demand  specialists  would  once 
more  produce  them. 

Eegarding  industrial  society  as  a  unit,  or  larg- 
er man,  the  operation  of  the  law  of  service  in  so- 
cial conditions  is  no  less  indisputable  than  in  such 
solitary  conditions  as  those  of  Crusoe.  The  va- 
rious service-rendering  parts  of  society — special- 
ists in  their  several  departments, — like  the  various 
parts  of  his  physical  body  in  the  case  of  a  solitary 
producer  like  Crusoe,  respond  to  the  demands  of 
all.  TTio  multifarious  demands  of  society  as  a 


108  SOCIAL,    SERVICE 

whole  determine  the  character  and  degree  of  ac- 
tivity for  each  department  of  service,  and  thus 
for  each  individual,  much  as  Kobinson  Crusoe's 
demand  for  baskets  imposed  greater  activity  upon 
his  arms  and  less  upon  his  legs,  and  as  his  de- 
mand for  goat's  flesh  imposed  greater  activity  up- 
on his  legs  and  less  upon  his  arms.  And  inas- 
much as  individuals  pass  readily  from  one  de- 
partment of  service  to  any  one  of  several  kindred 
departments — as  a  doctor  might  become  a  nurse 
if  the  demand  for  doctors  fell  off  and  that  for 
nurses  increased,  or  a  nurse  might  make  a  pretty 
fair  doctor  in  an  emergency  if  conditions  were 
reversed — any  increase  of  activity  in  either  tends 
to  draw  service  to  that  department  and  away  from 
departments  in  which  activity  has  slackened. 

Although  the  identical  individual  who  leaves  a 
specialized  service  for  which  demand  has  declined 
or  ceased,  may  not  turn  to  the  identical  specialty 
in  which  it  has  risen,  he  turns  to  a  place  for  serv- 
ice somewhere  between  the  point  of  decline  and 
the  point  of  rise.  Every  individual  who  does 
come  into  the  more  active  department  leaves  a 
vacancy  in  another,  which  may  be  filled  from  still 
another,  and  that  from  another,  and  so  on  all  the 
way  down  the  line.  Social  service  flows  as  water 
does.  Though  the  water  drawn  from  a  reservoir 
is  not  the  same  water  that  thereupon  flows  into 
the  reservoir,  the  outflow  at  the  one  point  makes 
room  for  inflow  at  the  other;  and  while  each  par- 
ticle of  water  may  move  but  slightly,  the  whole 
body  of  water  is  readjusted.  So  with  social  serv- 
ice. Though  each  specialist  but  slightly  changes 
his  specialty  when  demand  alters,  the  whole  body 
of  social  service  is  readjusted  in  harmony  with 
the  alteration  of  demand. 

Have  I  been  confusing  social  service  with  com- 
modities? Probably  I  have.  But  I  thought  w« 
had  come  to  an  understanding  on  that  score. 


DEMAND    AND     SUPPLY  109 

There  is  really  no  difference,  you  know,  except  in 
external  form,  between  social  service  and  such  ar- 
tificial commodities  as  houses,  machinery,  cloth- 
ing, food,  and  the  other  concrete  products  of 
human  exertion.  If  I  give  you  legal  advice,  I  am 
serving  you;  and  if  you  mend  my  mashed  thumb 
you  are  serving  me.  So  the  waiters  at  Joseph's 
restaurant  who  bring  us  our  food  when  we  go 
there,  and  the  cook  who  cooks  it,  are  serving  us. 
These  are  intangible  services.  But  the  table  fur- 
niture and  the  foods,  those  commodities  of  the 
restaurant,  and  the  building  itself  with  the  kitch- 
en utensils, — these  things  also  are  services.  They 
are  concrete  products  of  somebody's  labor  for  us — 
of  many  somebodies  back  of  the  waiter,  back  of 
the  cook,  and  back  and  back  in  many  directions, 
through  the  social  service  market. 

You  understand  me,  of  course,  when  I  say 
"labor."  I  don't  mean  merely  one  class  of  labor, 
as  the  newspapers  do.  I  mean  all  serviceable  ac- 
tivities. Also  their  respective  abilities ;  for  I  can't 
refine  things  down  to  the  point  that  Mallock  does 
of  distinguishing  between  an  ability  and  an  activ- 
ity— not  if  the  ability  is  worth  a  copper. 

Neither  will  you  understand,  I  hope,  that  by 
products  I  mean  creations.  Man  cannot  create. 
He  cannot  add  an  atom  to  the  universe.  But  he 
can  so  modify  the  conditions  of  matter,  both  as  to 
form  and  place,  as  to  adapt  it  in  its  altered  condi- 
tion and  different  place  to  the  function  of  directly 
or  indirectly  gratifying  human  desires.  To  do 
this  is  to  produce  artificial  commodities.  Produc- 
tion implies  the  adaptation  of  means  to  ends,  by 
changing  either  the  shape  or  the  place  of  matter, 
or  both,  from  natural  to  artificial  conditions,  in 
order  to  gratify  human  wants. 

Specialists  at  farming  bring  forth  wheat  from 
the  soil.  This  is  an  example  of  production  by  the 
alteration  of  matter  as  to  shape.  But  as  men 


110  SOCIAL    SERVICE 

produce  wheat,  not  because  wheat  is  in  itself  an 
object  of  human  desire — for  it  isn't,  you  know, — 
but  because  it  is  necessary  material  for  producing 
things  that  in  themselves  are  objects  of  human  de- 
sire, the  production  of  wheat  is  only  a  step  in  the 
process  of  producing  something  else.  Other  steps 
remain  to  be  taken. 

If  bread  be  the  ultimate  object,  then  wheat  is 
to  that  extent  unfinished  bread.  In  order  that 
flour  may  be  obtained  from  it,  which  would  also 
be  unfinished  bread,  the  wheat  is  carried  to  a 
mill.  This  is  an  example  of  alteration  of  matter 
as  to  place.  By  so  changing  the  location  of  the 
wheat  as  to  bring  it  nearer  to  its  destination  as 
finished  bread,  its  condition  is  improved  as  a 
concrete  social  service,  as  an  artificial  commodity, 
— as  "wealth/'  to  fall  back  upon  the  term  of  the 
political  economists.  Inasmuch,  then,  as  addi- 
tional wealth  consists  not  merely  in  increase  of 
quantity,  but  also  in  improvement  of  quality,  the 
supply  of  wealth  is  thereby  augmented.  Wouldn't 
you  say  that  a  hundred  bushels  of  good  wheat  is 
more  wealth  than  a  hundred  bushels  of  poor 
wheat?  Not  more  wheat,  but  more  wealth — more 
capability  of  giving  satisfaction,  more  serviceable- 
ness?  Very  well,  in  the  same  sense  a  hundred 
bushels  of  wheat  at  the  Minneapolis  mills  is  more 
wealth  than  the  same  wheat  out  on  a  Minnesota 
prairie — not  more  wheat,  mind  you,  but  more 
wealth. 

The  wheat  having  been  transported  to  the  mill, 
it  is  there  ground  under  the  supervision  of  mill- 
ers, who  are  social  servitors  just  like  Joseph's 
waiters,  only  farther  back  in  the  process,  and 
with  machinery  produced  by  an  army  of  other  so- 
cial servitors  like  themselves  but  in  different  spe- 
cialties. The  resulting  flour  is  another  change  in 
shape,  which  augments  the  amount  of  wealth.  It 
destroys  the  wheat  as  wheat,  but  it  increases  the 


DEMAND     AND     SUPPLY  111 

wealth,  the  social  serviceableness  of  the  embodied 
individual  services.  Then  the  flour  is  transported 
to  bakeries,  which  increases  it  as  wealth  by  bring- 
ing it  nearer  to  the  consumers,  whoever  they  may 
prove  to  be.  At  the  bakeries,  bread  is  produced 
from  the  flour — another  increase  of  wealth  by 
change  of  shape.  Then  the  bread  goes  to  the 
hotels  and  houses  and  restaurants — another  in- 
crease of  wealth  by  change  of  place, — and  some  of 
it  comes  to  Joseph's  perhaps,  where  you  and  I 
may  consume  a  slice  or  two  of  one  of  the  loaves. 

Each  of  these  changes  is  a  step  in  the  process 
of  altering  natural  objects  for  the  gratification  of 
man's  desire  for  the  artificial  object  bread.  It  is 
a  step  in  the  process  of  adapting  means  to  ends 
for  the  satisfaction  of  human  desire.  And  the 
changes  of  place  are  no  less  important  than  the 
changes  of  shape.  Taken  all  together,  and  with 
the  like  production  of  tools,  machinery,  buildings, 
trained  animals,  ships,  cars,  and  other  conve- 
niences for  bringing  bread  from  the  soil  to  the 
consumer,  and  all  the  cognate  commercial  proc- 
esses, they  constitute  the  complete  operation  of 
producing  one  species  of  wealth — one  concrete 
form  of  social  service. 

All  wealth  production  consists  in  similar  alter- 
ations of  the  shape  and  place  of  matter,  so  as  to 
change  it  from  the  natural  condition  in  which 
we  find  it,  to  the  varied  artificial  conditions  in 
which  we  need  it  to  serve  in  the  satisfaction  of  our 
wants.  Each  variety  of  food  as  well  as  bread,  of 
clothing  as  well  as  food,  of  shelter  as  well  as 
both,  every  artificial  implement,  structure  and 
conveyance,  whether  little  and  simple  or  great 
and  complex,  which  is  used  in  the  production  of 
any  or  every  kind  of  consumable  wealth, — in  a 
word,  whatever  man  fashions  for  the  gratification 
of  man's  desires,  whether  indirectly,  as  productive 
buildings  or  machinery,  or  directly,  as  consum- 


112  SOCIAL     SERVICE 

able  goods,  consists  simply  in  objects  altered  in 
shape  and  place  by  those  human  activities  which 
we  are  considering  as  social  service. 

And  every  social  servitor  under  whose  mani- 
pulation or  through  whose  custody  any  of  these 
things  pass  in  the  process  of  adapting  them  to  the 
wants  of  the  consumer  as  to  shape  or  place,  as- 
sists in  their  production  by  adding  to  their  serv- 
iceability. The  retail  storekeeper  and  his  assis- 
tants, from  errand  boy  to  cashier;  the  wholesaler 
and  his  assistants,  from  truckman  to  credit  man; 
the  manufacturer  and  all  his  workmen ;  the  farm- 
er and  his  hired  help ;  the  mine  operator  and  his 
gangs  of  miners;  those  who  work  upon  railroads 
and  those  who  man  ships;  the  banks  which  keep 
tab  upon  exchanges  as  a  sort  of  common  book- 
keepers, and  which  as  brokers  distribute  credit 
from  lenders  to  borrowers ;  the  "drummer"  who  in- 
creases the  general  economy  by  going  to  buyers 
who  but  for  him  would  be  obliged  whenever  in 
want  of  goods  to  go  to  commercial  centers,  and 
the  buyers  who,  when  it  is  more  economical  all 
things  considered,  do  travel  to  commercial  cen- 
ters— in  brief,  every  person  who  facilitates  the 
shaping  of  any  artificial  and  serviceable  object, 
or  its  delivery  to  consumers  in  the  form  and  place 
required  by  them,  is  a  producer  of  wealth  in  the 
social  service  market. 

Need  I  remind  you  again  that  the  final  object 
of  it  all  is  the  satisfaction  of  individual  desires? 
Bread  is  made  because  we  want  to  eat  it ;  it  is  not 
eaten  because  we  want  to  make  it.  And  that  is 
only  another  way  of  saying  that  it  is  produced  in 
accordance  with  the  demand  for  it  for  consump- 
tion,— that  the  supply  is  in  all  respects  deter- 
mined (pathological  conditions  apart)  by  the  de- 
mand. 

And  I  needn't  explain  to  you,  of  course,  that 
consumption  doesn't  mean  destruction.  The  law 


DEMAND    AND     SUPPLY  113 

of  the  conservation  of  energy  settles  that.  What 
we  do  in  consumption  is  precisely  what  we  do  in 
production — change  the  condition  of  objects.  By 
production  we  change  natural  objects  to  artificial 
conditions  for  the  purpose  of  satisfying  desire ;  by 
consumption  we  change  artificial  objects  back  to 
natural  conditions  in  the  process  of  satisfying  de- 
sire. We  change  wool  to  cloth  and  cloth  to  a  coat, 
to  satisfy  the  desire  for  clothing;  we  change  the 
coat  back  to  the  natural  elements  of  wool,  by  wear- 
ing it  out  in  satisfying  that  desire. 

Inevitably  the  same  law  of  supply  and  demand 
applies  to  service  in  the  production  of  concrete 
objects  as  in  service  direct.  Service  direct  and 
service  by  wealth^  production  are  all  one  in  prin- 
ciple. Demand  for  coats  increases  the  supply  of 
wool,  cloth  and  coats,  because  social  service  turns 
to  the  production  of  those  things,  turning  from 
the  production  of  other  things  if  demand  for  them 
falls  off.  And  so  we  have  the  natural  law  I  have 
outlined  for  you.  The  law  that  the  demand  for 
social  service  determines  the  direction  in  which 
individual  services  will  be  rendered,  is  the  same 
thing  as  the  law  that  the  demand  for  consumption 
determines  the  direction  in  which  service  will  be 
applied  in  production.  And  both  formulas  mean, 
translated  into  the  language  of  money,  that  the 
direction  in  which  money  is  expended  in  satisfy- 
ing demand,  determines  the  direction  in  which 
money  will  be  expended  in  providing  supply. 

Not  quite  true  that  demand  for  consumption 
determines  the  direction  of  service  in  production? 
Not  quite  true  because  things  are  usually  produced 
in  advance  of  demand  for  consumption? 

Yes,  many  things,  most  things  in  the  narrow 
interpretation  you  are  adopting  now,  Doctor,  really 
are  produced  in  advance  of  demand  for  consump- 
tion. Individuals  do  usually  demand  products 


114  SOCIAL    SERVICE 

that  have  been  already  made.  Shoemakers,  for 
instance,  demand  and  in  fact  receive  for  the  mon- 
ey they  get  for  shoes,  coats  that  may  have  long 
lain  on  the  dealer's  shelves  awaiting  a  sale.  But 
are  you  warranted,  therefore,  in  supposing  that  the 
demands  of  shoemakers  for  coats  do  not  cause 
coats  to  be  produced?  I  hardly  think  so.  Why, 
suppose,  Doctor,  that  coats  were  not  bought  by 
shoemakers  any  more  at  all.  Wouldn't  that  some- 
what discourage  the  making  of  more  coats?  I 
thought  you  would  say  so.  In  the  long  run,  then, 
wouldn't  it  appear  that  it  is  the  demand  for  coats 
that  keeps  up  the  supply? 

While  it  is  true  that  in  general  trade,  specific 
goods  are  made  in  advance  of  specific  demand  for 
them,  it  would  be  very  superficial  to  infer  that 
therefore  production  determines  consumption  in- 
stead of  being  determined  by  it.  "What  do  white 
folks  mean  by  babies  cutting  their  teeth?"  asked 
the  Negro  philosopher  in  that  story  you  so  like 
to  tell  to  young  mothers.  "Seems  to  me/'  he 
continued  by  way  of  explaining  his  perplexity — 
don't  you  recall  it  in  its  present  application,  Doc- 
tor,— "seems  to  me  the  teeth  cut  the  baby;  least- 
ways that's  the  way  it  seems  with  colored  babies." 
No,  no,  Doctor;  service  in  production  doesn't  de- 
termine the  direction  of  demand  for  consumption ; 
demand  for  consumption  always  determines  the 
direction  of  service  in  production, — always  in  the 
long  run,  and  this  long  run  isn't  such  a  very  long 
run  either. 

The  collection  of  commodities  in  the  market  is 
analogous  to  the  collection  of  water  in  reservoirs. 
No  water  reservoir  would  be  built  if  there  were 
no  water  consumers.  But' as  there  are  water  con- 
sumers, the  reservoir  is  built  because  in  that  way 
their  demands  for  water  can  in  certain  circum- 
stances be  supplied  most  easily.  It  is  considered 
by  reservoir  builders  as  humanly  certain  that  as 


DEMAND    AND     SUPPLY  115 

Boon  as  the  water  consumers  realize  this,  they  will 
resort  to  the  reservoir  instead  of  digging  wells  or 
carrying  from  springs.  Now,  observe.  What  may 
be  called  the  social  service  reservoir,  of  which  wa- 
ter reservoirs  are  but  one  department,  serves  in 
all  respects  a  similar  purpose.  Stores  are  filled 
with  goods  in  advance  of  specific  demand,  not  to 
induce  specific  demand  except  incidentally  it  may 
be,  but  in  obedience  to  general  demand.  There 
is  approximately  a  constant  demand  for  wealth, 
for  artificial  commodities,  in  consequence  of  which 
these  commodities  are  continuously  in  process  of 
completion.  You  find  them  continually  unfin- 
ished in  factories,  in  forests,  in  mines,  and  upon 
farms,  continually  in  transit  upon  ships,  cars  and 
wagons,  and  continually  flowing  in  and  out  of 
warehouses,  wholesale  stores  and  retail  stores.  De- 
mands may  be  supplied  for  the  most  part  from 
existing  stock,  but  the  stock  is  at  once  replenished 
from  this  flowing  stream  in  accordance  with  these 
demands. 

Isn't  that  equivalent  to  the  proposition  that  de- 
mand for  consumption  determines  the  direction  of 
service  in  production  ?  Whether  a  bootmaker  takes 
his  customer's  measure  and  makes  a  pair  of  shoes, 
as  'Lisha  Bartron  used  to  do  out  home  when  we 
were  boys,  or  keeps  shoes  in  stock  and  when  he 
sells  a  pair  buys  another  like  them,  as  Alec  How- 
ell  did  at  the  postoffice  store, — what  difference 
does  it  make  in  the  general  round-up  ?  In  either 
case,  shoes  are  supplied  pursuant  to  demand.  In 
one  case  the  shoe-seller  anticipates  the  demand  and 
gives  extra  accommodation  to  his  customers  by 
having  the  goods  ready  at  hand  when  wanted;  in 
the  other  the  shoemaker  obliges  his  customers  to 
wait  until  the  goods  can  be  made. 

That  some  peculiar  things  are  made  before  there 
is  a  demand  for  them,  and  for  the  plain  purpose 
of  creating  that  demand,  argues  nothing.  These 


116  SOCIAL,    SERVICE 

things  are  made  in  the  hope  of  a  demand.  Unless 
it  sets  in,  their  production  is  abandoned ;  if  it  sets 
in,  their  production  is  continued.  Yes,  production 
may  sometimes  actually  take  place  and  no  demand 
ever  arise,  as  in  the  case  of  that  new  nostrum 
you  mention  which  was  placed  upon  the  market 
but  didn't  catch  on.  But  this  was  done  in  ex- 
pectation of  demand,  and  I  guess  you'll  admit  that 
the  market  didn't  get  a  second  supply.  Where  is 
that  nostrum  now?  You  couldn't  buy  a  package 
to  save  you.  Why?  Because  demand  has  deter- 
mined supply — determined  it  "down  and  out." 
The  other  instances  you  mention  are  cases  in  which 
the  supply  only  seems  to  precede  demand,  but 
does  not  in  fact  precede  it  in  any  reasonable  sense. 
Although  the  goods  were  stored  months  in  advance 
of  when  they  were  wanted  for  consumption,  they 
were  demanded  and  consumed  in  due  season  and 
a  new  supply  was  consequently  produced.  Doesn't 
the  fact  remain,  after  all  your  apparent  excep- 
tions, that  production  in  any  direction  rises  and 
falls  in  consequence  of  the  rise  and  fall  of  demand 
for  consumption? 

When  demand  for  consumption  withdraws  any 
kind  of  wealth  from  the  commercial  reservoir,  a 
tendency  to  the  reproduction  of  that  kind  of  wealth 
is  thereby  started.  What  consumers  demand  of 
retailers,  the  latter  demand  of  the  trade;  and 
what  they  demand  of  the  trade,  manufacturers 
who  seek  the  money  wherewith  to  satisfy  their 
own  desires,  are  anxious  to  make.  Very  much  in-, 
deed  as  water  when  drawn  from  a  reservoir  is  re- 
produced to  the  reservoir  from  springs,  through 
rivers  and  lakes  and  artificial  conduits,  are  arti- 
ficial commodities  in  general  reproduced  from  va- 
rious parts  of  the  earth.  They  are  produced  by 
means  of  machinery,  railroads,  ships,  wagons, 
warehouses  and  wholesale  stores,  which  in  their 
entirety  are  analogous  to  the  rivers,  lakes  and  con- 


DEMAND     AND     SUPPLY  117 

duits  of  a  water  supply,  and  are  caused  to  flow 
into  retail  stores,  which  correspond  to  the  distrib- 
uting pipes  and  faucets  of  water  systems.  The 
difference  is  that  the  water  will  continue  to  flow 
in  the  same  volume  from  the  springs  though  the 
demand  for  it  ceases.  But  artificial  commodities 
will  not  continue  to  flow  after  demand  has  ceased, 
nor  in  the  same  volume  after  demand  declines; 
for  the  persons  who  as  a  whole  demand  these 
things  are  the  very  persons  who  as  a  whole  supply 
them. 

Let  me  elaborate  the  simile  so  as  to  be  sure  that 
we  grasp  its  significance.  Imagine  a  universal 
water  supply  system  in  which  every  local  reservoir 
is  connected  by  pipes  with  great  reservoirs,  and 
these  in  turn  with  the  natural  source  of  supply, 
so  that  water  from  any  part  of  the  system  may 
flow  to  any  lower  part.  You  know  of  course  that 
the  taking  of  water  from  a  local  reservoir 
must  so  affect  all  the  water  in  the  system  as  to 
result  immediately  in  the  replacement  from  the 
natural  source  of  supply  of  a  quantity  of  water 
equal  to  what  is  taken  out.  Unless  there  are  ob- 
tructions,  Doctor;  unless  there  are  obstructions. 
Precisely  this  is  the  natural  arrangement  of  the 
world's  system  of  wealth  supply,  and  precisely  so 
is  its  operation.  When  shoes  are  demanded  at  a 
retail  store,  the  retailer  supplies  them  and  repeats 
the  demand  back  to  the  wholesaler;  the  whole- 
saler supplies  that  demand  and  repeats  it  back 
to  the  manufacturers;  they  respond  and  repeat  it 
back  to  producers  of  raw  material,  and  to  all  kinds 
of  workmen  in  any  wise  connected,  directly  or  in- 
directly, principally  or  collaterally,  with  the  ma- 
king of  shoes.  Finished  shoes  taken  out  for  con- 
sumption are  consequently  at  once  replaced  by 
finished  shoes  that  were  then  almost  finished,  and 
these  by  shoes  that  were  then  farther  removed 
from  finishment,  and  so  on  back,  stage  by  stage, 


118  SOCIAL.    SERVICE 

to  the  rawest  of  the  raw  materials  that  enter  into 
shoemaking  or  shoemaking  machinery. 

True,  the  replacement  is  not  with  shoes  that 
have  been  wholly  made  since  the  specific  demand, 
nor  in  consequence  of  it;  but,  what  is  essentially 
the  same,  they  come  from  the  constantly  flowing 
stream  of  shoe  supply.  Eising  on  the  cattle  ranch 
and  in  other  sources  of  the  raw  material  for  shoes 
and  for  the  machinery  for  shoemaking,  this  in- 
dustrial and  commercial  stream  flows  as  steadily 
as  a  river,  if  unobstructed;  as  steadily  as  a  river 
it  flows  from  the  sources  of  natural  supply  on 
ranches  and  farms  and  in  mines  and  forests, 
through  railroads,  slaughter  houses,  tanneries, 
shoe-machine  factories,  warehouses,  shoe  factories, 
ships,  and  wholesale  stores — all  of  them  modes  of 
social  service,  don't  you  see  ? — to  its  outlet  into  the 
great  ocean  of  consumption  at  retail  stores. 

While  the  specific  demand  for  a  particular  pair 
of  ready-made  shoes  does  not  cause  the  production 
of  those  particular  shoes,  it  does  cause  the  com- 
pletion of  other  shoes,  which  causes  progress  in 
making  still  others,  which  causes  the  beginning 
of  the  production  of  others,  and  so  also  of  all  the 
buildings  and  machines  of  whatever  kind  that 
are  needed  in  the  production  of  shoes.  When  the 
total  demand  for  shoes  and  their  total  production 
are  compared,  we  find  shoe  production  in  all  its 
departments  continually  responding  to  the  demand 
for  shoes. 

It  may  even  be  hasty  to  say  that  specific  demand 
for  a  particular  pair  of  ready-made  shoes  at  the 
retail  store  does  not  cause  the  production  of  those 
particular  shoes.  That  statement  is  not  quite 
exact.  For  this  very  demand  does  cause  the  final 
act  of  producing  those  very  shoes — the  act  of  sell- 
ing and  delivering  them  to  the  consumer;  and  it 
must  never  be  forgotten  that  the  final  act  of  pro- 
duction is  quite  as  necessary  as  the  first,  though 


DEMAND    AND     SUPPLY  119 

the  two  may  be  separated  by  many  intermediate 
acts  of  production  and  a  long  interval  of  time. 
If  the  final  act  were  not  demanded,  the  commer- 
cial and  industrial  stream  would  "back  water"; 
all  the  preceding  acts  of  production  would  im- 
mediately slacken  and  finally  stop.  If  the  pur- 
chase of  shoes  at  retail  stores  stopped,  all  the  mul- 
tifarious processes  of  making  shoes,  and  of  making 
the  machines  and  buildings  for  those  processes, 
would  also  stop. 

In  whatever  light  you  examine  the  law  that 
demand  for  consumption  determines  supply  by 
production,  you  will  find  that  it  holds  good  in  all 
circumstances.  It  is  the  same  whether  demand 
causes  the  production  throughout  of  the  particu- 
lar thing  demanded,  or  simply  keeps  the  stream 
of  production  flowing.  It  is  the  same  where  popu- 
lation is  dense,  division  of  labor  minute  and  civili- 
zation high,  no  less  than  on  a  lonely  island  with 
a  population  of  but  one  or  two,  or  in  the  almost 
self-sufficing  hamlet  of  our  far-away  boyhood. 

And  of  course  this  law  determines  quality  and 
variety  as  well  as  quantity.  Demand  for  more 
wealth  of  every  variety,  directs  service  to  the  pro- 
duction of  more  wealth  of  every  variety.  Demand 
for  more  wealth  of  a  particular  variety,  directs  it 
to  the  production  of  more  wealth  of  that  variety. 
Demand  for  a  better  quality  of  wealth  of  any 
variety,  directs  it  to  the  production  of  a  better 
quality  of  that  variety.  Demand  for  luxuries  turns 
it  in  that  direction,  and  demand  for  vicious  in- 
dulgence has  a  similar  effect. 

Individual  services  in  production  turn  toward 
general  demand  for  consumption  unerringly  in 
every  particular.  Nothing  else  is  possible  in  the 
long  rim  or  general  round-up.  How  could  demand 
for  consumption  be  satisfied  if  the  social  service 
market  did  not  pretty  promptly  respond  with  more 
production?  Why,  Doctor,  don't  you  see  that 


120  SOCIAL    SERVICE 

mankind  would  begin  to  perish  to-morrow  if  pro- 
duction stopped  to-day?  Don't  you  realize  yet 
that  mankind  lives  literally  from  hand  to  mouth  ? 
Don't  you  know  that  there  is  no  other  way  ? 

Oh,  yea,  a  man  might  live  to  three  score  and  ten, 
consuming  much  and  producing  nothing;  but  he 
would  be  living  upon  other  people's  production,  at 
the  expense  of  other  people's  work,  in  the  sweat  of 
other  people's  faces  instead  of  his  own;  and  that 
wouldn't  be  possible  unless  he  were  either  a  pitiful 
pensioner  or  a  powerful  parasite.  Mankind  as  a 
whole  cannot  do  it. 

Saving  ?  Pardon  me,  Doctor,  while  I  say  "bosh" 
— under  my  breath  and  politely,  but  "bosh !"  Don't 
you  know  that  wealth  can't  be  saved?  Claim* 
upon  wealth,  more  or  less  legitimate,  may  be  ac- 
cumulated, and  create  an  appearance  of  saving 
wealth  even  for  generations;  but  that  wealth  is 
really  saved  is  a  delusion. 

Those  boiled  eggs  you  had  at  breakfast,  they 
weren't  laid  two  generations  ago  by  your  grand- 
father's hens  and  saved  for  you.  They  were  laid 
yesterday  by  your  neighbor's  hens — hens  atten- 
tively nurtured  by  him  so  as  to  make  them  "good 
layers,"  and  which  were  not  born  until  long  after 
your  grandfather  died. 

You  bought  the  eggs,  did  you  ?  bought  them  with 
money.  Good.  Now,  how  did  you  get  the  money  ? 
If  you  took  it  out  of  those  coal  mine  royalties 
of  yours,  somebody  in  the  social  service  market,  or 
some  congeries  of  somebodies,  has  supplied  you 
with  service  to  the  extent  of  a  couple  of  eggs  with- 
out getting  an  equivalent  in  service.  But  if  you 
paid  for  them  out  of  your  wages  for  helping  to 
bring  Tom  and  Mary's  little  girl  safely  into  this 
spinning  world  of  social  service,  then  you  paid  for 
your  eggs,  and  they  were  as  truly  yours  as  if  your 
own  hens  had  laid  them  and  your  own  hands  had 
cooked  them. 


DEMAND    AND     SUPPLY  121 

Don't  you  realize,  Doctor,  that  demand  for  con- 
sumption is  not  satisfied  from  hoards  of  products  ? 
There  cannot  possibly  be  any  great  accumulation 
of  these  artificial  commodities.  They  won't  keep. 
No  sooner  are  the  processes  of  production  com- 
plete than  the  products  are  on  their  way  back  to 
their  original  elements.  If  they  are  not  consumed 
they  decay. 

Of  the  products  that  existed  a  century  ago,  what 
remains?  A  few  works  of  art,  a  few  trinkets,  a 
few  relics,  a  few  houses  that  have  cost  their  worth 
in  repairs.  How  much  remains  of  what  existed 
only  a  quarter  of  a  century  ago,  when  you  and  I 
were  long  past  our  youth?  Some  machinery,  not 
much;  buildings  and  highways  that  have  cost  in 
repairs  nearly  as  much  as  they  are  worth;  and  a 
few  works  of  art,  trinkets  and  relics  in  addition  to 
those  a  century  old.  Even  the  products  of  a  year ! 
Consider  the  enormous  supply  of  clothing  and 
clothing  material,  and  food  and  food  material, 
that  existed  a  year  ago  but  is  gone  now.  In  fact, 
all  the  accumulations  even  of  yesterday  will  be  so 
depleted  by  consumption  come  to-morrow,  that  we 
must  have  continuous  accessions  of  new  supplies  in 
order  to  live  into  next  week. 

Again  it  is  like  the  water  reservoir.  We  city 
people  seem  to  be  taking  accumulated  savings  of 
water  from  the  reservoir ;  but  how  long  before  we 
should  have  to  go  thirsty  and  bathless  if  water 
were  not  all  the  while  flowing  into  the  reservoir? 

And  isn't  it  clear,  Doctor,  that  this  law  of  con- 
tinuous demand  and  responsive  supply  disposes 
completely  of  the  notion,  which  at  one  time  had 
almost  attained  to  the  dignity  of  a  theory,  and 
which  got  you  tangled  up  in  a  lot  of  protection 
fallacies — isn't  it  clear  that  it  completely  disposes 
of  the  notion  that  periods  of  industrial  stagnation 
are  caused  by  general  production  of  wealth  in 
excess  of  general  demand  for  wealth — by  over- 


122  SOCIAL    SERVICE 

production,  as  they  call  it?  Aren't  you  willing  to 
admit  now  that  that  notion  of  overproduction,  is 
absurd  ? 

Occasional  and  temporary  overproduction  in 
particular  specialties?  Yes,  thai  is  possible,  of 
course.  Since  products  in  various  stages  of  finish- 
ment  continually  flow  to  consumers  from  their 
original  source  in  advance  of  specific  though  not 
of  general  demand,  a  decline  of  specific  demand 
for  particular  products  may  prevent  some  of  them 
from  reaching  consumers  at  remunerative  prices. 
A  change  of  fashion  in  hats,  for  example,  may 
leave  upon  the  hands  of  hat  manufacturers  and 
dealers  an  unavailable  stock  of  hats,  and  of  hats 
that  are  so  far  finished  as  to  make  their  materials 
useless  for  hats  of  the  newer  fashion.  But  this 
will  occasion  no  loss  to  hat  makers  which  they 
won't  make  up  in  the  brisk  demand  for  another 
kind  of  hat.  It  may  be  also  that  misjudgment  or 
misadventure  may  overstock  the  market  with  some 
commodity  the  demand  for  which  has  not  fallen; 
but  in  such  cases  the  equilibrium  would  soon  be 
restored. 

And  anyhow,  Doctor,  these  slight  special  and 
temporary  overflows  of  supply  are  not  meant 
when  business  stagnation  is  accounted  for  by  over- 
production. That  notion  alludes  to  excessive  pro- 
duction not  merely  in  some  directions  but  in  all 
directions.  Now,  isn't  overproduction  in  all  di- 
rections practically  impossible  so  long  as  those  of 
us  who  render  service  get  service  in  exchange? 
Isn't  there  a  mutuality  of  demand  which  makes 
excessive  general  supply  almost  if  not  quite  un- 
thinkable, without  some  pathological  cause  ?  Inas- 
much as  demand  for  consumption  determines  the 
direction  in  which  labor  will  be  expended  in  pro- 
duction, production  as  a  whole  can  never  exceed 
demand  as  a  whole;  that  is  to  say,  the  supply  of 
service  as  a  whole  can  never  exceed  the  demand 


DEMAND    AND     SUPPLY  138 

for  service  as  a  whole.  How  could  it?  Isn't  it  ab- 
surd to  suppose  that  beings  who  demand  wealth, 
and  are  able  and  willing  reciprocally  to  satisfy 
one  another's  demands  for  it,  should  suffer  the  ills 
of  poverty  from  general  overproduction  of 
wealth? 

In  normal  social  conditions  the  labor  in  the  so- 
cial service  market  is  the  total  productive  force  of 
individuals  who  produce  only  that  they  themselves 
may  consume.  They  are  the  same  individuals.  Just 
as  Eobinson  Crusoe  was  a  producer  while  adapting 
means  to  ends  for  satisfying  his  desires,  and  a 
consumer  while  satisfying  his  desires,  so  are  men 
in  the  social  service  market  producers  as  to  the 
services  they  supply,  and  consumers  as  to  the 
services  their  wants  demand.  Interchangeably 
employing  one  another,  they  are  producers  in  one 
of  their  two  great  social  relations,  and  consumers 
in  the  other.  How,  then,  let  me  ask  again,  could 
an  excess  of  products  harm  them,  either  as  con- 
sumers or  as  producers,  even  if  an  excess  of  pro- 
ducts were  possible? 

I'll  tell  you  what  it  is,  Doctor,  when  workers 
are  suffering  for  want  of  work  due  to  overproduc- 
tion of  what  they  want  to  consume,  social  condi- 
tions must  be  pathological.  As  a  normal  phe- 
nomenon it's  preposterous. 

The  demand  of  the  working  masses  for  wealth 
to  consume,  is  naturally  a  demand  for  their  own 
employment.  How  then  can  they  suffer  for  lack 
of  employment?  You  say  that  I  use  "demand" 
loosely — that  I  should  say  "effective  demand." 
That  is  of  course  to  be  understood.  By  "demand" 
I  mean  "effective  demand."  I  don't  mean  mere 
idle  wishing.  To  demand  the  service  of  others  if 
not  only  to  wish  for  it,  but  also  to  be  able  and 
willing  to  transfer  service  in  payment.  But  when 
workers  ask  for  service  that  other  workers  offer  in 
exchange  for  theirs,  and  arc  able  and  willing  and 


124  SOCIAL     SERVICE 

offer  to  put  their  own  services  into  the  social  serv- 
ice market  in  exchange,  don't  you  think  that  there 
is  on  each  side  an  effective  demand? 

Given  farmers  who  want  store  goods,  and  pro- 
ducers of  store  goods  who  want  farm  products, 
and  isn't  the  demand  of  each  an  effective  demand 
unless  something  abnormal  intervenes  to  prevent 
the  meeting  of  demand  and  supply  in  the  market? 
Given  a  man  who  can  and  will  do  something  to- 
ward making  shoes  and  who  wants  a  hat,  and  an- 
other who  can  and  will  do  something  toward  mak- 
ing a  hat  and  who  wants  a  pair  of  shoes,  and  aren't 
their  demands  mutually  effective  to  that  extent? 
Given  all  the  men  who  contribute  to  shoe  making 
and  shoe  delivery  and  who  want  hats,  and  all  who 
contribute  to  the  making  and  delivery  of  hats  and 
who  want  shoes,  and  aren't  their  respective  de- 
mands for  shoes  and  hats  effective  demands? 
Given  all  the  men  that  produce  the  things  that  all 
men  want,  and  aren't  their  mutual  demands  effec- 
tive demands?  In  the  absence  of  obstructions, 
Doctor,  in  the  absence  of  obstructions.  Don't  for- 
get that  reservation,  for  upon  it  hangs  all  the  trou- 
ble— yes,  and  the  remedy.  Eeciprocal  demand  in 
the  social  service  market  must  be  effective  in  the 
nature  of  things,  unless  arbitrary  obstructions  in- 
tervene. 

When  naturally  effective  demand  is  in  practice 
ineffective,  the  cause  will  be  found  to  be  not  in 
any  general  production  in  excess  of  effective  gen- 
eral demand,  but  in  some  interposed  obstacle  which, 
by  preventing  supply  from  meeting  and  satisfying 
demand,  gives  an  appearance — a  false  appearance 
— of  overproduction.  When  you  and  I  used  to 
rile  my  grandfather  by  backing  the  water  of  our 
spring-run  into  the  milk  house  and  setting  the 
cream  pans  afloat,  he  didn't  talk  about  overproduc- 
tion of  water  at  the  spring.  He  knew  better.  He 
knew  that  that  "overproduction"  was  caused  by 


DEMAND     AND     SUPPLY  125 

two  mischievous  boys  who  had  prevented  the  nat- 
ural flow  of  the  water  by  building  a  dam  in  the 
run ;  and  he  stopped  the  overproduction  by  making 
us  tear  down  the  dam.  You'll  remember,  too,  that 
no  claim  of  vested  rights  in  dams  built  by  labo- 
riously mischievous  boys  in  spring-runs  would 
have  gone  down  with  my  grandfather  when  the 
family  butter  was  at  issue. 

No,  no,  Doctor,  don't  come  back  to  that  notion 
of  saving.  You  can't  cause  overproduction  by 
saving,  any  more  than  you  can  have  eggs  by  sav- 
ing. I  have  already  shown  you  that  products 
can't  be  saved.  And  of  course  saving  wont  make 
you  independent  of  the  necessity  of  working  in 
response  to  the  law  of  supply  and  demand  that  we 
have  been  talking  about.  That  sort  of  indepen- 
dence does  not  come  from  possession  of  an  accum- 
ulation of  products.  It  comes  from  the  possession 
of  power  to  command  the  services  of  a  large  num- 
ber of  people  from  day  to  day,  without  ourselves 
working  day  by  day.  This  may  seem  like  saving 
products,  and  it  has  in  some  respects  the  same  or  a 
similar  effect;  but  it  isn't  the  same  thing.  It  is 
as  different  as  the  difference  between  saving  fish 
and  owning  fishermen. 

There  are  several  ways  of  getting  that  power. 
Some  are  good  and  some  are  bad,  some  normal  and 
some  pathological.  We  may  in  one  way  command 
the  service  of  others  by  serving  them  directly,  or 
by  serving  some  one  who  through  complex  ex- 
changes will  get  service  to  them.  If  our  service 
be  in  great  demand  and  we  are  skillful,  they  may 
enrich  us  with  service  in  the  directions  in  which 
we  require  it,  and  sufficiently,  it  may  be,  to  let  us 
take  a  day  off  now  and  then.  Or,  we  may  com- 
mand service  now  in  return  for  having  rendered 
service  in  the  past  to  be  repaid  with  future  serv- 
ice. Or,  we  may  command  service  now  by  bor- 
rowing upon  an  agreement  to  repay  in  future 


126  SOCIAL     SERVICE 

service.  Or,  we  may  command  service  now  in 
return  for  having  in  the  past  made  machinery  cap- 
able of  assisting  future  production,  and  deferring 
our  payment  until  it  comes  from  the  production 
to  which  that  machinery  will  contribute.  Or,  we 
may  command  service  by  exciting  compassion  or 
generosity,  and  having  it  offered  to  us  as  a  gift. 
Or,  we  may  command  it  by  physical  force,  as  in 
highway  robbery;  or  by  cunning,  as  in  fraud,  or 
blackmail  or  forgery;  or  by  legislative  power,  as 
in  slavery  statutes  and  other  public  grants  of  the 
private  privilege  of  exacting  service  without  giving 
service. 

Though  individuals  may  seem  in  some  of  those 
ways  to  save  wealth  already  produced,  what  in 
the  main  they  really  save  is  titles  to  wealth  to  be 
produced.  They  may,  for  instance,  accumulate 
promissory  notes,  or  bonds,  or  corporation  stock, 
or  bills  of  sale,  or  patents  where  they  are  allowed, 
or  titles  to  slaves  where  slavery  exists,  or  deeds  to 
land.  All  this  is  the  same  in  effect  to  them  as  an 
accumulation  of  products;  for,  without  further 
service,  they  may  by  means  of  these  titles  obtain 
productive  service  as  they  demand  it.  But  it  is 
not  in  all  cases  the  same  to  society  as  a  whole. 
What  they  gain  in  social  service  in  some  of  those 
ways,  others  must  supply  with  their  individual 
service;  and  somewhere  in  the  general  round-up, 
their  gain  will  of  necessity  be  some  one's  loss. 

But  don't  misunderstand  me,  Doctor,  as  making 
any  reflection  upon  the  justice  of  any  of  those 
modes  of  "saving" — not  yet,  at  any  rate,  not  yet. 
Some  of  them  are  entirely  just,  and  as  to  the  oth- 
ers,— well,  let  it  pass  for  the  present ;  it's  pathol- 
ogical. What  I  want  you  to  realize  clearly  now, 
is  the  fact  that  I  have  already  dwelt  upon,  that 
mankind  as  a  whole  cannot  save  wealth  in  any 
manner  for  any  considerable  time.  As  a  whole, 
mankind  can  obtain  wealth  only  as  mankind  pro- 


DEMAND     AND     SUPPLY  127 

duces  wealth.  What  is  demanded  for  consumption 
in  the  present  must  be  produced  by  present  labor. 
From  current  production,  and  virtually  from  cur- 
rent production  alone,  can  current  demand  for 
consumption  be  satisfied. 

Man  produces  because  he  desires  to  consume. 
His  demands  for  consumption  can  on  the  whole 
be  satisfied  only  from  current  production.  Activi- 
ties in  production  are  consequently  directed  by  de- 
mands for  consumption,  and  this  gives  us  the  law 
that  I  have  tried  to  make  clear, — the  law  that 
demand  for  consumption  determines  the  direction 
in  which  labor  will  be  expended  in  production. 
No,  pardon  me,  I  will  put  it  in  another  way,  es- 
sentially the  same  but  more  in  verbal  harmony 
with  the  rest  of  what  I  have  said.  I  will  formu- 
late the  law  in  these  words:  The  character,  va- 
riety, quality  and  volume  of  individual  services 
which  the  social  service  market  for  any  consider- 
able time  demands,  determine  the  character,  va- 
riety, quality  and  volume  of  the  individual  serv- 
ices which  the  social  service  market  supplies. 

That  this  is  a  sound  business  rule,  Doctor,  any 
intelligent  business  man  will  tell  you.  If  he  de- 
nies it,  ask  him  why  he  watches  the  market  re- 
ports and  regulates  his  output  if  he  be  a,  manu- 
facturer, or  his  purchases  of  stock  if  he  be  a  mer- 
chant, by  them.  Ask  him  if  he  doesn't  get  hints 
as  to  the  demand  for  his  goods,  between  the  lines 
of  his  "price  current,"  and  if  he  doesn't  govern 
himself  accordingly  in  regulating  the  supply. 


CHAPTER  VI. 
Competition. 

Now,  Doctor,  I  come  to  a  moot  poi-nt  between 
you  and  me,  a  vexatious  one,  and  you  must  be 
patient.  I  don't  ask  so  much  that  you  give  an 
attentive  ear  to  what  I  may  say,  for  you  are 
always  attentive,  but  that  you  reflect  upon  its  re- 
lation to  the  two  social  service  laws  we  have  con- 
sidered. 

You  know  the  two  laws  I  mean:  the  law  that 
men  naturally  "go  for"  easy  money,  that  is  that 
they  naturally  seek  to  gratify  their  desires  in 
what  seems  to  them  to  be  the  easiest  way;  and 
the  law  that  the  direction  of  general  demand  for 
social  service  determines  the  direction  in  which 
the  supply  of  individual  services  will  tend.  An- 
other thing.  I  must  ask  you  to  remember  in 
connection  with  those  laws,  that  every  person 
who  renders  service  by  producing  what  others 
desire  and  swapping  it  for  what  he  desires,  vir- 
tually produces  for  himself  what  he  so  obtains. 

And  now,  when  I  say  "competition,"  you 
needn't  interrupt  with  your  "tooth  and  claw"  ar- 
gument. That  simile  from  the  jungle  is  no  doubt 
very  apt  as  an  illustration  of  some  of  the  manifes- 
tations of  competition  in  pathological  conditions — 
"jug-handled  competition,"  as  I  like  to  call  it; 
but  it  doesn't  apply  to  competition  in  normal 
conditions.  Quite  the  reverse,  my  dear  Doctor, 
quite  the  reverse. 

In  normal  conditions,  competition  and  co-opera- 
tion are  convertible  terms.  Abolish  competition? 


COMPETITION  129 

It  couldn't  be  done  without  abrogating  the  social 
service  laws  we  have  just  been  considering.  If 
they  are  laws,  you  can't  abrogate  them,  as  nobody 
knows  better  than  yourself ;  and  if  they  are  essen- 
tially beneficent,  as  I  think  they  are,  then  normal 
competition  must  be  beneficent,  as  I  believe  it  to 
be.  Even  if  we  could  abolish  competition,  to  do 
so  would  be,  as  Professor  Boss  says,  with  no  less 
truth  than  wit,  "like  pouring  out  the  baby  with 
the  bath." 

You  realize  clearly  enough,  don't  you,  that  any 
scheme  for  organizing  the  production  and  distri- 
bution of  wealth — that  is,  for  the  systematic  ad- 
justment and  distribution  of  social  service — 
which  did  not  conform  to  those  two  laws  we  have 
talked  about,  would  be  a  hopeless  botch?  Well, 
that  is  what  is  involved  in  every  scheme  for 
abolishing  competition.  What  we  need,  Doctor, 
is  not  a  scheme  to  abolish  competition,  but  one 
to  rid  ourselves  of  its  pathological  conditions. 
In  your  studies  of  the  "white  plague,"  you  don't 
look  forward  to  abolishing  the  lungs,  do  you? 
Isn't  it  to  relieve  them  of  something  abnormal? 
And  doesn't  that  illustration,  even  if  it  is  crude, 
suggest  to  you  my  attitude  toward  competition? 

As  I  look  at  the  matter,  it  is  the  automatic 
processes  of  competition,  and  those  alone,  that 
can  determine  for  the  social  service  market  what 
on  the  one  hand  is  the  normal  demand  for  serv- 
ice, and  how  on  the  other  it  can  be  the  most 
easily  supplied.  Most  easily  for  everybody  con- 
cerned, I  mean,  and  not  for  privileged  persons. 
For  let  me  remind  you  again  that  when  I  say 
"competition"  I  do  not  mean  "jug-handled  com- 
petition," which  so  often  seems  to  be  your  concep- 
tion, and  which  really  does  make  these  great  in- 
dustrial disparities  that  you  and  I  both  abhor. 
What  I  do  mean  is  competition,  or  emulation,  on 


130  SOCIAL    SERVICE 

the  basis  of  equal  opportunities  and  a  square  deal 
all  around. 

Impossible?  Well,  if  a  square  deal  under  com- 
petition in  the  social  service  market  is  impossible, 
I  am  for  knocking  out  whatever  governmental 
adjustments  there  may  be  that  make  it  impos- 
sible. I  shan't  assail  competition  itself,  which 
is  as  natural  as  breathing,  so  long  as  there  are 
unnatural  legalities  to  account  for  industrial  dis- 
parities. I  shall  at  least  look  for  a  rift  in  the 
lute  before  I  condemn  music. 

Competition  seems  to  me  to  be  the  only  guar- 
antee of  a  square  deal  that  we  have  in  this  world 
of  selfish  impulses.  It  is  to  social  service  some- 
what as  gravitation  is  to  physics — Nature's  de- 
vice for  maintaining  an  equilibrium.  Individual 
services  flow  in  the  direction  of  the  easiest  oppor- 
tunities for  satisfying  desire,  as  persistently  as 
water  flows  down  hill.  That  fact  is  both  the 
cause  and  the  necessity  for  competition.  There 
is  no  other  test  of  fair  dealing.  Everybody  has 
to  measure  labor  energy  by  its  irksomeness  to 
himself. 

Whenever  any  kind  of  social  service  product 
sells  for  more  money  than  will  hire  men  to  make 
other  products  like  it,  individual  services  tend 
toward  the  making  of  products  of  that  kind, 
which  tends  to  bring  down  their  price  by  the 
special  over-supply.  You  see  that,  don't  you? 
Well,  let's  analyze  it. 

The  fact  that  a  product  sells  for  more  money 
than  before,  shows  that  the  demand  for  service 
of  that  kind  is  in  excess  of  the  supply.  Compe- 
tition has  spoken  from  one  direction.  Under  one 
of  our  two  social  service  laws,  therefore,  indi- 
vidual services  tend  toward  bringing  demand  and 
supply  in  that  respect  to  an  equilibrium.  Com- 
petition has  now  spoken  from  another  direction. 
And  so  matters  oscillate  until  the  increased  sup- 


COMPETITION  131 

ply  of  that  kind  of  service  equals  the  demand 
for  it,  which  is  indicated  by  a  decline  in  the 
price  of  such  products  to  the  old  level.  Compe- 
tition has  then  had  its  last  word,  so  far  as  that 
particular  disturbance  of  values  is  concerned. 
But  it  continues  to  operate  as  potential  competi- 
tion— that  is,  as  a  social  force  which  must  be 
taken  into  account  regarding  any  possible  varia- 
tion in  demand  and  supply.  Producers  and  con- 
sumers— who  in  normal  conditions  are  the  same 
persons,  you  remember — are  then  restored  to  an 
equality  in  the  interchange  of  services;  and  so 
long  as  the  pressure  of  competition  remains  the 
same  on  all  sides,  this  equality  cannot  be  dis- 
turbed. 

Reflect  upon  it,  Doctor,  and  yon  will  see  that 
competition  is  the  equilibrating  force  of  the  social 
service  market.  Why,  I  would  as  soon  think  of 
regulating  physical  equilibrium  by  some  legisla- 
tive substitute  for  natural  forces,  as  to  regulate  or 
abolish  competition  by  legislation. 

You  won't  see  any  of  this  very  clearly,  of 
course,  if  you  think  of  what  you  call  'laborers" 
as  responding  to  demands  for  service,  and  of  a 
leisure  class  as  making  the  demands.  But  it  will 
be  clear  enough  if  you  include  in  your  idea  of 
service  all  classes  of  laborers — from  boss  to  ap- 
prentice, from  statesman  to  errand  boy— co-oper- 
ating to  serve  one  another.  You  must  reject  al- 
together the  notion  of  a  leisure  class;  for  which, 
indeed,  as  you  must  already  realize,  there  is  no 
normal  place  in  the  social  service  market.  Its 
existence  is  one  of  the  marked  symptoms  of  social 
disease.  A  leisure  class  that  lives  in  luxury  on 
the  fat  of  the  land  is  socially  worse  than  one 
that  begs. 

Oh,  certainly,  any  reversal  of  the  experience 
in  supply  and  demand  with  which  I  have  just 
illustrated  would  be  due  to  the  same  two  laws 


132  SOCIAL     SERVICE 

that  we  have  been  overhauling  and  examining. 
That  is  to  say,  just  as  competition  would  cause 
greater  production  in  response  to  higher  prices 
so  it  would  cause  less  production  in  response  to 
lower  prices.  If,  for  example,  a  product  begins 
to  sell  for  less  than  the  money  necessary  to  get 
service  in  reproducing  products  of  that  kind,  com- 
petition begins  to  draw  individual  services  away 
from  the  production  of  that  kind  of  product  until 
from  scarcity  its  price  has  risen  sufficiently  to 
restore  the  equilibrium  of  service  for  service. 
Don't  imagine,  however,  that  in  normal  condi- 
tions there  would  be  any  appreciable  interval  of 
slack  employment.  Human  desires  are  so  greedy 
that  if  they  are  oversupplied  in  any  direction 
they  soon  catch  up  unless  some  extraneous  force 
interferes,  and  so  varied  that  if  they  decline  or 
become  stationary  in  any  direction  they  increase 
in  other  directions.  The  demands  of  men  for 
the  services  of  their  fellow  men  are  as  insatiable 
as  their  demands  for  air. 

I  am  assuming,  of  course,  that  the  alterations 
in  price  I  have  mentioned  are  not  due  to  any 
fluctuations  in  the  value  of  money.  Bear  in 
mind  that  when  it  is  money  that  falls  or  rises  in 
value,  all  products  tend  to  rise  or  fall  in  value 
accordingly.  The  equilibrium  is  not  disturbed 
except  as  to  debts.  But  I  am  considering  cases 
in  which  only  one  or  some  products  or  forms  of 
service  rise  or  fall. 

But  now,  Doctor,  remembering  that  money  is 
only  a  medium  for  swapping,  and  not  after  all 
the  thing  we  really  want,  isn't  it  plain  that  the 
whole  matter  which  I  have  been  considering, 
comes  down  to  the  question  of  human  irksome- 
ness?  You  think  it  comes  down  to  the  question 
of  value?  Aye,  but  isn't  value  due  to  irksome- 
ness?  Divest  human  nature  of  its  proneness  to 


COMPETITION  133 

become  weary  with  work,  and  no  such  thing  as 
value  could  arise,  could  it? 

I  reckon  you  recall  our  talk  about  value,  but 
what  you  say  now  shows  the  necessity  for  con- 
sidering it  a  little  further.  We  got  only  to  the 
point  that  value  results  from  desire  for  scarce 
objects.  But  we  didn't  consider  that  scarcity  may 
be  modified ;  and  you  doubtless  see  now  the  neces- 
sity for  further  consideration.  For  anything  that 
modifies  scarcity,  as  related  to  desirability,  must 
modify  value.  Isn't  that  obvious  ?  Suppose,  then, 
that  we  analyze  value  a  little  more  minutely. 

Take  any  labor  product  you  please :  bread,  cake, 
cigars,  coffee,  umbrellas,  whiskey,  poisons,  houses, 
hymn  books,  locomotives,  domesticated  dogs, 
trained  horses,  machinery — anything  that  can 
have  no  existence  beyond  the  form  and  place 
of  natural  raw  material,  except  as  it  gets  it 
from  human  exertion,  from  human  art;  take  any- 
thing, in  brief,  that  may  properly  be  called  arti- 
ficial, either  as  to  place,  or  as  to  shape,  or  as  to 
both.  How  could  that  product  possibly  have 
value  if  nobody  desired  it?  Of  course  it  couldn't. 
We  have  already  satisfied  ourselves  of  that, 
haven't  we?  No  object  is  valuable  unless  it  is 
desired  in  exchange  for  another  desired  object  or 
a  wearisome  service.  Here,  for  example,  is  this 
half-decayed  acorn  that  I  pick  up  in  our  path— 
but  no,  this  acorn  is  not  a  labor  product,  and 
we  are  talking  about  labor  products  now.  Ah, 
here  is  a  dilapidated  willow  whistle  that  I  made 
last  Summer  for  my  grandson.  He  has  got 
tired  of  it  and  chucked  it  into  my  overcoat 
pocket.  Now  who  would  give  any  thing  desirable 
in  exchange  for  that  voiceless  whistle?  Probably 
nobody.  Upon  that  supposition,  then,  it  has  no 
value.  So  we  may  put  in  a  pin  right  there— the 
same  pin  that  we  used  when  we  talked  of  value 


134  SOCIAL    SERVICE 

before.  No  labor  product  is  valuable  unless  it 
is  desirable. 

But  then  there  is  the  supplementary  considera- 
tion. No  matter  how  desirable  a  labor  product 
may  be,  it  wouldn't  be  valuable,  you  know,  unless 
it  was  scarce.  Very  good,  but  what  is  it  that 
makes  labor  products  scarce  ?  Well,  for  one  thing 
I  guess  we  can  safely  say  that  the  natural  limita- 
tions upon  human  productiveness  have  something 
to  do  with  it ;  for  they  wouldn't  exist  at  all  with- 
out human  productiveness,  which  would  be  abso- 
lute scarcity.  Now  for  relative  scarcity,  which  is 
the  practical  thing. 

Since  desire  for  labor  products  appears  to  be 
without  limitations,  and  human  power  to  pro- 
duce them  is  very  decidedly  limited,  there  is  of 
course  a  resultant  condition  of  scarcity  rela- 
tively to  desire.  This  condition  is  continuous, 
and  would  alone  give  value  to  labor  products. 
If  we  can  never  catch  up  to  demand  for  labor 
products,  we  can  never  eliminate  value ;  and  who- 
ever owns  a  desired  product  will  always  be  able 
to  swap  it  for  some  other  desired  product,  or  for 
some  measure  of  social  service  yet  to  be  per- 
formed. 

But  that  isn't  all,  Doctor.  Even  if  productive 
power  could  possibly  be  so  far  extended  as  to 
overtake  desire  for  products,  nevertheless  there 
would  be  scarcity  if  the  necessary  degree  of  work 
were  irksome.  And  wouldn't  it  be  irksome  ?  Well, 
"I  should  smile,"  as  the  boys  used  to  say.  No 
matter  how  delightful  any  work  may  be,  it  does 
make  us  tired  if  we  keep  at  it  and  does  become  irk- 
some if  we  have  to  keep  at  it,  doesn't  it  ?  Conse- 
quently he  who  possesses  a  desired  product  of 
labor,  can  swap  it  for  other  desired  products  of 
labor  whenever  the  owner  of  each  prefers  the  other 
to  his  own. 

And  what  is  more  to  the  point,  since  it  is  con- 


COMPETITION  136 

tinuous  labor  that  keeps  the  world  a-going — what 
is  much  more  to  the  point,  he  can  swap  his 
product  for  services  yet  to  be  performed.  Any 
one  will  weary  himself  to  render  a  service  for 
what  he  desires,  if  what  he  desires  cannot  be 
duplicated  without  weariness. 

How  much,  then,  will  he  weary  himself?  how 
much  service  will  he  render  ?  As  much  as,  on  the 
whole,  men  would  rather  do,  its  irksomeness  con- 
sidered, than  go  without  the  object  of  their  de- 
sire. Doesn't  that  seem  sensible?  In  other 
words,  the  exchange  equilibrium  which  is  known 
as  "value"  in  the  social  service  market,  is  brought 
about  by  an  adjustment  of  desire  to  irksomeness. 
And  this  is  essentially  the  same  thing — don't  you 
see? — as  an  adjustment  of  demand  to  supply. 

It  is  this  adjustment  of  demand  and  supply 
that  regulates  the  scarcity  of  desirable  labor 
products,  and  consequently  their  value.  For  con- 
venience we  express  it  in  terms  of  money.  And 
that  is  what  is  meant,  Doctor,  when  we  say  that 
"labor  is  the  measure  of  value,"  or  that  "labor 
determines  value,"  or  that  "value  is  the  labor 
cost  of  production."  It  is  the  reason,  also, 
that  the  values  of  products  fall  with  labor-saving 
invention.  Invention  tends  to  decrease  irksome- 
ness  in  production.  That  is,  it  enables  us  to 
get  a  greater  supply  with  less  effort.  And  de- 
crease of  irksomeness,  making  for  plenty,  lessens 
the  scarcity  of  supply  relatively  to  demand,  and 
thereby  lessens  value. 

Values  of  land?  Yes,  you  are  right;  "land 
value"  is  due  to  the  same  principle  as  "labor 
value."  No  matter  how  desirable  any  spot  on 
earth  may  be,  it  has  no  value  unless  spots  known 
to  be  of  that  desirability  are  scarce — that  is, 
scarce  where  they  are  desirable,  for  you  can't 
move  land,  you  know.  Here  you  have  again, 
don't  you  see,  the  conjunction  of  desirability  and 


136  SOCIAL    SERVICE 

scarcity  in  order  to  make  value?  But  there  is 
this  difference.  Scarcity  of  land  cannot  be  modi- 
fied by  human  labor.  Something  analogous  does 
indeed  happen  when  land  previously  so  inacces- 
sible as  to  be  undesirable,  comes  to  be  accessible 
and  desirable.  But  land  is  not  a  product  of  labor. 
It  cannot  be  made  to  order,  as  labor  products  can 
be.  It  is  a  gift  of  nature. 

Abstruse?  Yes,  you  always  speak  of  this  as 
abstruse,  and  perhaps  I  don't  explain  it  very 
well.  But  you  will  find  it  clearly  enough  as 
well  as  briefly  stated  in  that  copy  of  Henry 
George's  "Perplexed  Philosopher"  which  you 
have  in  your  pocket.  Allow  me  to  read  a  few 
sentences  instead  of  risking  a  botch  by  trying 
again  to  make  the  explanation  myself. 

Here  at  page  38  George  says  that  value  with 
regard  to  the  greater  number  of  valuable  things, 
"is  simply  an  expression  of  the  labor  required 
for  the  production  of  such  a  thing" — of  such  a 
thing,  Doctor;  not  of  those  identical  things,  but 
of  "such  a  thing,"  of  things  like  them, — which 
means  that  the  value  that  those  things  have 
depends  in  the  last  analysis  upon  the  degree  of 
weariness  the  co-operators  in  the  social-service 
market  will  endure  rather  than  do  without  them. 
That  is  what  I  have  been  trying  to  explain.  Well, 
to  get  back  to  the  book,  George  then  goes  on — 
I  shall  omit  some  passages,  for  they  are  not 
necessary  for  our  present  purpose,  and  you  can 
read  them  at  your  leisure.  He  then  goes  on 
to  say  at  page  39: 

But  there  are  some  things  as  to  which  this  is  not 
so  clear.  Land  is  not  produced  by  labor;  yet  land, 
irrespective  of  any  improvements  that  labor  has 
made  on  it,  often  has  value.  And  so  value  frequent- 
ly attaches  to  the  forms  of  the  economic  term  "land" 
that  we  commonly  speak  of  as  natural  products,  such 
as  trees  in  their  natural  state,  ore  In  the  vein,  stone 
or  marble  in  the  quarry,  or  sand  or  gravel  in  the  bed 


COMPETITION  137 

Yet  a  little  examination  will  show  thai  such  facts 
are  but  exemplifications  of  the  general  principle,  just 
as  the  rise  of  a  balloon  and  the  fall  of  a  stone  both 
exemplify  the  universal  law  of  gravitation. 

To  illustrate:  Let  us  suppose  a  man  accidentally 
to  stumble  on  a  diamond.  Without  the  expenditure 
of  labor,  for  his  effort  has  been  merely  that  of  stoop- 
ing down  to  pick  it  up,  an  action  in  itself  a  gratifica- 
tion of  curiosity,  he  has  here  a  great  value.  But 
what  causes  this  value?  Clearly  it  springs  from  the 
fact  that,  as  a  rule,  to  get  such  a  diamond  will  re- 
quire much  expenditure  of  labor.  If  any  one  could 
pick  up  diamonds  as  easily  as  in  this  case,  diamonds 
would  have  no  value.  ...  In  the  naturally  wood- 
ed section  of  the  United  States  trees  had  at  first  not 
merely  no  value,  but  were  deemed  an  incumbrance, 
to  get  rid  of  which  the  settler  had  to  incur  the  labor 
of  felling  and  burning.  Then  lumber  had  no  value 
except  the  cost  of  working  it  up  after  it  had  been 
felled,  for  the  work  of  felling  had  for  object  the  get- 
ting rid  of  the  tree.  But  soon,  as  clearing  proceeded, 
the  desire  to  get  rid  of  trees  so  far  slackened,  as 
compared  with  the  desire  to  get  lumber,  that  trees 
were  felled  simply  for  the  purpose  of  getting  lumber. 
Then  the  value  of  lumber  increased,  for  the  labor  of 
felling  trees  had  to  be  added  to  it;  but  trees  them- 
selves had  as  yet  no  value.  As  clearing  still  pro- 
ceeded and  the  demand  for  lumber  grew  with  grow- 
ing population,  it  became  necessary  to  go  farther 
and  farther  for  trees.  Then  transportation  began  to 
be  a  perceptible  element  in  the  labor  of  getting  lum- 
ber, and  trees  that  had  been  left  standing  began  to 
have  a  value,  since  by  using  them  the  labor  of 
transportation  would  be  saved.  And  as  the  require- 
ment for  lumber  has  compelled  the  lumbermen  to 
go  farther  and  farther,  the  value  of  the  trees  re- 
maining has  increased.  But  this  value  is  not  in- 
herent in  the  trees:  it  is  a  value  having  its  basis  in 
labor,  and  representing  a  saving  in  labor  that  must 
otherwise  be  incurred.  The  reason  that  the  tree  at 
such  a  place  has  a  value,  is  that  obtaining  it  there 
secures  the  same  result  as  would  the  labor  of  trans- 
porting a  similar  amount  of  lumber  from  the  greater 
distance  to  which  resort  must  be  made  to  satisfy  the 
demand  for  lumber. 

Turn  back  a  page,  Doctor,  and  you  will  see 


138  SOCIAL    SERVICE 

that  George  has  qualified  this  last  statement  by 
saying:  "Or,  to  speak  exactly,  to  get  the  last 
amount  of  such  lumber  that  the  existing  demand 
requires."  Now  let  me  read  on  a  little  farther: 
And  so  with  the  value  which  attaches  to  ore  or 
sand  or  gravel.  Such  value  is  always  relative  to  the 
labor  required  to  obtain  such  things  from  points  of 
greater  distance  or  of  less  abundant  deposits,  to 
which  in  the  existing  demand  resort  is  necessary. 
We  thus  see  the  cause  and  nature  of  land  values,  or, 
to  use  the  economic  term,  of  rent.  No  matter  how 
fertile  it  may  be,  no  matter  what  other  desirable 
quality  it  may  have,  land  has  no  value  until,  wheth- 
er by  reason  of  quality  or  location,  the  relation  be- 
tween it  and  the  most  advantageous  land  to  which 
labor  may  have  free  access  gives  to  its  use  an 
advantage  equivalent  to  the  saving  of  labor.  .  .  . 
Thus  the  phenomena  of  value  are  at  bottom  illustra- 
tions of  one  principle.  The  value  of  everything  pro- 
duced by  labor,  from  a  pound  of  chalk  or  a  paper  of 
pins  to  the  elaborate  structure  and  appurtenances  of 
a  first-class  ocean  steamer,  is  resolvable  on  analysis 
into  an  equivalent  of  the  labor  required  to  reproduce 
euch  a  thing  in  form  and  place;  while  the  value  of 
things  not  produced  by  labor,  but  nevertheless  sus- 
ceptible of  ownership,  is  in  the  same  way  resolvable 
into  an  equivalent  of  the  labor  which  the  ownership 
of  such  a  thing  enables  the  owner  to  obtain  or  save. 

There's  your  book,  Doctor.  Eead  what  I  have 
omitted  and  what  follows,  and  the  idea  will  grow 
upon  you. 

If  you  care  for  other  illustrations,  recall  the 
story  of  the  Dakotas.  When  you  and  I  were 
boys,  Dakota  lands  weren't  worth  much  of  any- 
thing. That  was  because  nobody  desired  them. 
But  those  same  lands  now  have  a  value — a  great 
value.  Their  possession  gives  a  very  great  ad- 
vantage to  labor  over  lands  that  are  no  more 
desirable  than  Dakota  lands  were  in  our  boy- 
hood. They  are  consequently  much  desired  and 
scarce,  and  the  advantage  expresses  itself  in 
terms  of  money  as  land  value. 

Moreover, — and  here  is  the  point  I  wish  you  to 


COMPETITION  139 

concentrate  upon  in  connection  with  our  sub- 
ject, which  is  competition,  you  know, — moreover, 
the  scarcity  of  these  lands  cannot  be  modified  by 
labor  as  the  scarcity  of  labor  products  can  be.  As 
scarcity  of  desirable  products  attracts  labor  to 
their  reproduction,  it  lessens  their  scarcity  and 
therefore  their  value;  but  as  desirable  land  at- 
tracts labor  to  its  utilization,  its  scarcity  in- 
creases, and  therefore  its  value.  This  is  what  is 
meant  by  the  difference  between  those  two  loose 
terms,  "labor  values"  and  "land  values." 

Now,  if  you  notice,  Doctor,  you  will  see  that 
land  values  shade  off  from  hundreds  of  thou- 
sands and  even  millions  of  dollars  an  acre  in  our 
New  Yorks  and  Chicagos,  to  almost  zero  in 
remote  farming  districts.  Why?  Evidently  be- 
cause the  dear  land  is  for  some  reason  very  de- 
sirable and  very  scarce,  whereas  the  rest  is  pro- 
gressively less  desirable  and  less  scarce.  And  if 
you  notice  further  you  will  find  that  it  is  where 
service  is  most  specialized  and  consequently  most 
productive  that  land  is  scarcest  relatively  to  its 
desirability,  and  therefore  most  valuable.  Don't 
you  see  now  that  while  labor  holds  the  value  of 
products  in  check,  it  increases  the  value  of  land  ? 

What  is  the  reason  ?  Shouldn't  you  say  that  it 
has  to  do  with  our  old  friend  Mr.  Irksomeness? 
Seems  to  me  so.  If  I  have  a  machine  that  will 
enable  you  to  produce  what  you  want  with  less 
irksomeness  than  without  it,  you  will  serve  me 
in  exchange  for  that  machine,  or  will  give  me 
some  of  your  products  in  using  the  machine, 
and  consequently  the  machine  will  have  a  value. 
How  much  value?  A  value  in  proportion  to  its 
capability  of  saving  the  work  necessary  to  pro- 
duce a  machine  like  it.  Isn't  that  true?  Well, 
the  same  thing  is  true  of  land,  just  as  George 
explains  in  his  book.  If  I  have  a  building  lot 
in  a  location  that  will  enable  you  to  satisfy  your 


140  SOCIAL     SERVICE 

desires  with  less  weariness  than  a  lot  in  another 
place,  you  will  give  more  service  for  the  one 
than  for  the  other.  Both  the  lot  and  the  machine 
have  value  because  their  possession  will  in  some 
degree  save  weariness  in  satisfying  our  wants,  and 
more  or  less  value  according  to  the  degree  of  that 
saving. 

But,  Doctor,  note  the  vital  difference  to  which 
I  have  alluded — the  difference  between  the  value 
of  the  machine  and  the  value  of  the  land,  not- 
withstanding that  the  value  of  each  is  determined 
by  the  labor  its  possession  will  save.  Machines 
can  be  reproduced  practically  without  limit 
through  interchanges  of  service,  but  land  cannot. 
Consequently — and  mark  me  now — if  there  were 
no  obstructive  legal  regulations  no  one  who  owns 
a  machine  could  get  more  service  for  it,  either 
directly  or  indirectly,  whether  by  sale,  by  rental, 
or  by  deductions  from  the  products  of  the  workers 
who  use  it,  than  it  costs  in  social  service  to  make 
one  like  it. 

In  other  words,  in  the  absence  of  obstructive 
legal  regulations,  owners  of  machines  could  get  no 
more  service  of  others  than  they  give  of  their  own 
service,  though  their  absolute  ownership  of  the 
machines  be  fully  recognized.  But  not  so  with 
the  owners  of  land.  If  their  absolute  ownership 
be  fully  recognized,  and  there  be  no  obstructive 
legal  regulations,  those  that  own  land  will  get 
more  service  than  they  give. 

Don't  you  see  the  reason?  Why,  the  land  is 
both  desirable  and  scarce.  No,  no,  Doctor,  not 
physically  scarce;  you  can  neither  decrease  nor 
increase  the  area  of  land,  and  in  fact  there  is 
plenty  of  land  in  the  physical  sense.  What  I 
mean  is,  scarce  in  the  market — difficult  to  buy 
because  owners  are  loth  to  sell.  Nevertheless, 
there  are  physical  considerations.  It  is  the  fixed 
amount  of  land  naturally  that  makes  the  market 


COMPETITION  141 

scarcity  when  demand  sets  in.  Ah,  yes,  that  old 
notion  about  the  "indestructible  powers  of  the 
soil"  which  Professor  Eutley  used  to  talk  to  us 
about — yes,  yes,  quite  natural  that  it  should  heave 
up  in  your  memory.  But  that  isn't  what  I  mean 
by  fixed  amount  of  land.  Though  the  powers  of 
the  soil  are  truly  enough  indestructible,  this 
doesn't  make  the  differential  values  of  land — not 
to  any  important  extent,  at  any  rate.  Location  is 
the  main  thing — not  natural  fertility,  but  loca- 
tion. Well,  any  how,  the  point  here  is  that  land 
tends  to  rise  in  value  so  as  to  give  land  owners 
more  service  than  they  render,  whereas  machines 
do  not  tend  to  rise  in  value  so  as  to  give  machine 
owners  more  service  than  they  render.  The  rea- 
son is  that  men  cannot  make  more  land,  but  they 
can  make  more  machines. 

The  value  of  land  rises  in  direct  opposition  to 
the  value  of  services.  As  land  tends  upward, 
services  tend  downward — as  a  proportion  always, 
and  as  an  absolute  quantity  often.  He  who  owns 
desirable  land  of  a  given  degree  of  scarcity  finds 
it  so  valuable  that  he  can  get  service  from  others 
without  giving  service  of  his  own — either  past 
or  present  or  future  service  of  his  own, — just  as 
old  Sampson  wants  to  do,  and  expects  to  do,  and 
will  do  with  that  vacant  lot  of  his  over  yonder. 

But  with  machines,  if  they  become  more  desir- 
able, they  do  not  become  more  scarce  and  there- 
fore more  valuable  unless  their  multiplication  is 
arbitrarily  restricted,  which  is  pathological.  On 
the  contrary,  if  the  social  service  market  is  free, 
as  it  must  be  to  be  healthy,  machines  become 
more  and  more  plentiful  as  they  become  more 
and  more  desirable,  and  consequently  they  be- 
come more  and  more  cheap.  As  their  increasing 
desirability  tends  to  increase  their  market  value, 
social  service,  drawn  in  expanding  volume  to 
their  production  by  improved  and  improving 


~142  SOCIAL    SERVICE 

methods  of  co-operation,  not  only  holds  their  ris- 
ing value  in  check  but  turns  it  downward. 

Why,  think,  man,  of  the  strides  that  have  been 
made  in  a  few  years  in  automobile  manufacture, 
for  instance.  If  it  were  not  for  patents,  you 
could  get  automobiles  much  cheaper  than  ten 
years  ago.  If  it  were  not  for  various  forms  of 
taxation  that  obstruct  the  manufacture,  sale  and 
operation  of  automobiles,  you  could  get  and  use 
them  still  cheaper.  Even  as  it  is,  in  spite  of 
all  obstructions,  automobiles  can  be  had  now  for 
less  than  they  could  be  had  for  ten  years  ago; 
not  as  good  ones  by  present  standards,  may  be, 
but  as  good,  I  guess,  as  by  the  standards  of  ten 
years  ago,  and  probably  better. 

Don't  you  see  now,  how  radical  the  difference 
is  between  absolute  property  in  machines  and 
absolute  property  in  land?  Don't  you  see  how 
competition  tends  to  reduce  the  value  of  ma- 
chines, to  the  enrichment  of  everybody;  and  how 
it  tends  to  increase  the  value  of  land,  to  the  en- 
richment of — well,  of  land  owners  as  things  are 
under  monopoly  of  land,  but  of  everybody  as 
things  would  be  under  equitable  adjustments  of 
rights  to  land.  And  doesn't  this  show  you  what 
the  natural  function  of  competition  is? 

In  normal  conditions,  competition  maintains 
the  equilibrium  of  service  between  machine  pro- 
ducers and  machine  users;  but  monopoly,  the 
antithesis  of  competition,  disturbs  this  equili- 
brium. Competition  tends  to  diminish  scarcity 
with  reference  to  desirability;  it  tends  to  make 
plenty  for  all.  But  monopoly  tends  to  diminish 
plenty  with  reference  to  desire;  it  tends  to  per- 
petuate scarcity  for  all  but  the  privileged. 

The  doctrine  of  "all  the  traffic  will  bear"  is 
after  all  a  true  expression  of  the  force  that 
governs  the  social  service  market.  This  doctrine 
has  a  bad  name  ?  Yes,  truly ;  but  that  is  because 


COMPETITION  143 

it  has  always  been  applied  to  pathological  symp- 
toms. Kailroad  eompanies  get  authority  from 
government  to  set  up  a  carrying  monopoly,  and 
then  charge  "all  the  traffic  will  bear."  In  such 
a  case  "all  the  traffic  will  bear"  means  all  that 
the  social  service  market  will  pay  rather  than 
go  without  the  carrying  service.  It  is  a  monopoly 
price,  based  upon  a  monopoly  privilege.  But  if 
there  were  no  monopoly  privilege,  would  "all  the 
traffic  will  bear"  mean  all  that  the  social  service 
market  will  pay  rather  than  go  without?  Nary, 
Doctor,  nary!  It  would  mean  all  that  the  social 
service  market  would  pay  rather  than  turn  to 
and  reproduce  that  particular  kind  of  service, — 
which  is  a  very  different  thing,  I  can  tell  you. 

Under  monopoly,  the  limit  of  what  a  social 
servitor  can  get,  is  what  other  social  servitors 
will  give  rather  than  go  without  such  service  as 
his ;  under  competition,  the  limit  of  what  a  social 
servitor  can  get,  is  what  other  social  servitors 
will  give  rather  than  turn  more  social  service 
energy  into  his  field  of  service.  A  vast  differ- 
ence, Doctor,  a  vast  difference. 

When  sellers  of  services  demand  the  most  they 
think  they  can  get,  and  buyers  offer  the  least 
they  think  sellers  will  take,  it  makes  a  tremen- 
dous difference  whether  the  sellers  monopolize 
that  kind  of  service  or  have  to  compete.  If  they 
monopolize  it,  they  will  get  more  than  equal 
service;  if  they  have  to  compete,  they  can't  get 
more.  The  rule  of  "all  the  traffic  will  bear"  is 
only  a  slang  expression  of  the  law  that  men  seek 
to  gratify  their  desires  with  the  least  exertion.  If 
this  law  operates  in  monopolistic  conditions,  it 
will  tend  to  produce  pathological  symptoms;  but 
if  it  operates  in  competitive  condiHons,  it  will 
tend  to  produce  and  maintain  social  health. 

In  competitive  conditions,  as  in  monopolistic, 
the  seller  of  services  may  desire  the  most  service 


144  SOCIAL    SERVICE 

of  the  kind  he  wants  in  exchange  for  the  least  of 
the  kind  he  offers,  and  the  buyer  may  incline  to 
offer  the  least  of  what  the  other  wants  in  ex- 
change for  what  the  other  offers ;  but  in  competi- 
tive conditions,  other  buyers  and  other  sellers 
compete,  and  this  produces  and  maintains  an 
equilibrium  of  value  at  the  point  of  equality  of 
exertion. 

To  put  the  same  thing  in  another  way.  Every- 
one who  pays  his  way  in  this  world  is  both  a 
buyer  and  a  seller  of  services — a  seller  of  his  own 
services,  and  a  buyer  of  the  services  of  others.  As 
buyer,  each  seeks  the  most;  as  seller,  each  would 
offer  the  least.  This  is  natural,  Doctor,  accord- 
ing to  a  law  of  human  nature  which  can  no  more 
be  abrogated  than  any  other  phase  of  the  law  of 
self-preservation.  In  emergencies  some  men  will 
act  contrary  to  all  such  laws,  and  so  we  have  mar- 
tyrs. But  to  act  in  contravention  of  those  laws  in 
ordinary  conditions  is  to  disturb  the  social  equili- 
brium. If  some  of  us  were  to  offer  the  most  in 
exchange  for  the  least,  we  should  become  victims 
to  those  who  insisted  upon  giving  the  least  in 
exchange  for  the  most.  The  thing  would  be  un- 
workable unless  all  of  us  were  angelic  enough  to 
offer  most  for  least.  And  this  isn't  heaven,  Doc- 
tor, as  you  have  found  out  on  more  than  one  ac- 
casion,  and  I  too.  Maybe  we  have  both  done  our 
share  toward  keeping  it  unheavenly;  maybe  we 
have,  maybe  we  have.  At  any  rate,  if  nothing 
more  could  be  said  for  competition  than  that  it  is 
"God's  law  of  co-operation  for  a  selfish  world," 
that  alone  would  be  enough. 

If  competition  were  untrammeled,  it  would 
produce  an  equilibrium  of  values  in  buying  and 
selling  at  the  point  of  equality  of  serviceableness. 
Isn't  that  fair?  Yet  we  hear  objections  to  com- 
petition— and  you  yourself  have  made  some  of 
them — as  if  it  were  something  morally  wrong 


COMPETITION  145 

and  economically  unbalancing.  For  instance, 
there  is  Vida  Scudder's  "Social  Ideals  in  English 
Letters,"  one  of  the  most  genuine  and  delightful 
books  I  have  ever  read — even  that  book  turns 
aside  to  take  an  occasional  "fall"  out  of  competi- 
tion. Come  into  the  house  and  sit  down  a  few 
minutes  while  I  get  it  and  read  you  a  passage. 
Here  you  are,  and  here's  the  book.  Let  me  read 
you  this  paragraph:  "The  competitive  system, 
dimly  felt  by  some  people  to  be  at  the  basis  of 
the  evil" — the  evil  against  which  "the  love  of  man 
and  freedom"  would  hurl  its  weapons,  mind  you, 
Doctor, — "was  as  irresponsible  as  it  was  mighty. 
From  one  point  of  view,  moreover,  it  was  a  very 
safeguard  of  personal  liberty.  'Laissez  faire,' 
in  economic  phenomena,  corresponded  accurately, 
if  rather  grimly,  to  Emerson's  poetic  theories  of 
the  right  of  every  man  to  shape  the  universe  ac- 
cording to  his  powers.  Unrestricted  competition 
seemed  not  only  sternly  just,  according  to  the 
ideas  current,  but  inevitable  as  a  law  of  nature. 
Society,  possessed  by  fresh  and  often  crude  per- 
ceptions of  evolutionary  principles,  felt  helpless 
before  it;  for  it  did  but  carry  out  impersonally, 
inexorably,  the  struggle  for  existence  and  the 
survival  of  the  fittest.  Even  to-day  many  people 
feel  that  it  is  either  sentimental,  criminal,  or  at 
best  hopeless,  to  seek  to  disturb  by  conscious  ef- 
fort the  action  of  so-called  natural  law  in  civiliza- 
tion." 

Of  the  competitive  system  that  criticism  might 
be  rightly  made,  I  suppose.  But  what  is  loosely 
called  the  "competitive  system"  is  not  competitive. 
It  is  honeycombed  with  privileges  and  all  manner 
of  institutional,  arbitrary,  and  legalized  unfair- 
ness. And  it  always  has  been,  historically  speak- 
ing. The  competitive  system  is  to  competition 
much  as  a  ship  covered  with  barnacles  is  to  a  ship 
with  a  clean  hull.  It  is  a  system  of  competition 


146  SOCIAL    SERVICE 

between  the  privileged  and  the  unprivileged.  In 
so  far  as  it  is  competition  at  all,  it  is  jug-handled 
eompetition.  The  legally  strong  though  indus- 
trially useless,  enter  into  "free"  contracts  with 
the  legally  weak  but  industrially  useful ! 

Do  away  with  such  a  system  ?  Of  course.  But 
you  can't  do  away  with  it  by  "conscious  effort"  to 
disturb  "the  action  of  so-called  natural  law  in 
civilization."  It  is  just  such  efforts  that  make 
the  most  fertile  soil  for  monopolies.  To  do  away 
with  the  competitive  system  is  a  very  different 
thing  from  doing  away  with  unrestricted  com- 
petition. 

Doesn't  unrestricted  competition  mean  to  let 
everybody  alone?  That  depends  upon  what  you 
mean  by  letting  alone.  It  does  not  mean  to  let 
everybody  or  anybody  alone  to  interfere  with  pro- 
duction, with  rendering  service,  with  industry. 
Such  interferences,  whether  by  government  or  by 
highwaymen,  are  precisely  what  ought  to  be 
stopped  in  the  interest  of  unrestricted  competi- 
tion. Unrestricted  competition  does  mean  that 
everybody  should  be  let  alone  in  production,  in 
trade,  in  service,  in  usefulness  to  his  fellows,  in 
making  the  world  better  and  richer,  and  in  secur- 
ing a  fair  distribution  of  service  among  those  who 
render  service. 

Truly  enough,  "laissez  faire"  is  the  word — "let 
alone,"  that  is  the  watchword  of  competition.  But 
it  isn't  all  of  it.  As  the  old  democratic  econo- 
mists of  France  put  it — those  preceptors  of  Adam 
Smith — it  was  "laissez  faire,  laissez  aller."  Now, 
how  would  you  translate  that,  Doctor?  Don't 
you  think  that  George's  free  translation  of  "a 
fair  field  and  no  favor"  will  do?  Or  we  might 
make  it  "a  square  deal  and  no  odds,"  or  best  of 
all,  maybe,  "equal  rights  and  no  privileges." 

There  is  no  competition  in  the  policy  of  "let 
alone,"  unless  you  abolish  privileges.  But  with 


COMPETITION  147 

equal  rights  and  no  privileges,  can  you  imagine 
anything  fairer  or  squarer  or  juster  in  industry, 
in  trade,  in  social  service,  than  the  policy  of  "let 
alone"  ?  This  doesn't  mean  a  "struggle  for  exist- 
ence and  survival  of  the  fittest"  in  the  sense  of 
survival  of  the  strong  at  the  expense  of  the  weak, 
nor  even  of  survival  of  the  more  productive  at 
the  expense  of  the  less  productive.  It  means  fair 
distribution  in  proportion  to  production.  It 
means  that  he  who  renders  the  most  and  the  best 
service  in  his  specialty  shall  get  the  most  and  the 
best  service  from  other  specializes,  while  those 
who  render  the  least  and  the  poorest  shall  nev- 
ertheless get  the  equivalent  of  what  they  do  ren- 
der. And  it  leaves  the  decision  to  those  who 
in  equal  freedom  make  the  deal  for  the  service. 

Competition  is  the  natural  regulator  of  the  law 
of  the  line  of  least  resistance.  Without  such  reg- 
ulation that  law  might  stimulate  the  strongest — 
not  the  strongest  in  rendering  service,  but  the 
strongest  in  extorting  service — to  get  service  with- 
out giving  an  equivalent  service  of  his  own.  There 
is  your  savage  "tooth  and  claw"  condition,  Doc- 
tor. But  under  free  competition  this  would  be 
impossible,  for  free  competition  restrains  the  in- 
dividual desires  of  each  by  the  opposition  of  the 
individual  desires  of  others.  In  other  words, 
competition  tends  to  produce  an  equilibrium  of 
the  self-serving  impulse  at  the  most  useful  level  of 
social  service. 

It  is  a  word  of  confusing  connotations,  this 
word  "competition,"  as  are  all  living  words;  and 
it  may  not  be  the  best  word  for  conveying  my  idea. 
But  I  can't  manufacture  words,  Doctor.  All  I 
can  do  is  to  make  unto  myself  a  definition,  and 
always  to  use  my  word  in  that  sense;  and  all  I 
can  ask  you  to  do  is  to  adopt  my  definitions  when 
you  try  to  understand  my  discourse. 

Though  competition  may  not  be  quite  synony- 


148  SOCIAL    SERVICE 

mous  with  natural  co-operation,  it  is  closely  re- 
lated to  it,  and  in  such  a  manner  as  to  justify  me, 
I  think,  in  characterizing  it  as  the  life  principle 
of  natural  co-operation. 

Monopoly,  on  the  other  hand,  whether  its  pur- 
pose be  malevolent  or  benevolent,  is  the  death 
principle  of  natural  co-operation. 

So  it  seems  to  me  that  you  will  grasp  the  sig- 
nificance of  competition  best  by  contrasting  it 
with  monopoly. 

To  sum  it  all  up,  there  are  only  two  ways  of 
regulating  co-operative  service,  that  social  service 
which  springs  from  individual  desires  for  self- 
service.  One  way  is  by  monopoly;  the  other 
is  by  free  competition.  Monopoly  is  pathologi- 
cal, and  socially  destructive;  competition  is  nat- 
ural, and  socially  creative. 


CHAPTER  VH. 
The  Mechanism  of  Social  Service. 

What  did  I  mean  in  one  of  our  talks,  when  I 
spoke  of  the  mechanism  of  social  service?  Well, 
let  me  see.  Suppose  I  answer  your  question  Yan- 
kee fashion,  by  asking  another.  What  do  you  and 
I  and  everybody  else  mean  by  business  ?  Answer 
that  question,  Doctor,  and  you  have  answered  your 
own.  The  mechanism  of  social  service  and  the 
processes  of  business  are  two  terms  for  the  same 
thing. 

Business  in  the  broad  sense  is  what  I  mean, 
of  course,  and  not  in  the  restricted  sense  in  which 
narrow-minded  men  sometimes  use  the  word. 
Banking,  for  instance,  that  is  business  to  be  sure ; 
but  it  is  not  all  of  business.  Neither  banking  nor 
any  other  kind  of  co-operative  service — and  bank- 
ing is  co-operative  service,  mind  you — is  all  of 
business ;  no,  nor  are  many  kinds  of  such  service, 
short  of  all  kinds. 

You  work  in  a  profession.  So  do  I.  We  like 
to  call  them  "professions,"  our  industrial  tribes 
do,  so  as  to  make  our  work  seem  more  respectable 
than  business;  and  the  "business  man,"  for  some 
similar  reason  likes  to  call  his  vocation  "business" 
BO  as  to  distinguish  it  from  farming,  and  me- 
chanics, and  common  labor,  and  so  on,  all  of 
which  he  holds  beneath  his  dignity — except  as  a 
boastful  memory  of  something  from  which  he  has 
escaped.  There  is  a  sort  of  "class  consciousness" 
in  the  whole  thing,  as  our  socialistic  neighbor 
down  the  street  would  call  it.  But  Mr.  Bryan 


150  SOCIAL     SERVICE 

was  right  when  he  told  the  business  classes  away 
back  in  1896,  that  they  were  too  narrow  in  their 
ideas  of  what  constitutes  business. 

Business  includes  all  forms  of  production  and 
trade — farming,  transporting,  storekceping,  bank- 
ing, the  professions.  It  includes  also  the  work 
of  the  men  who  get  stipulated  wages,  as  well  as 
that  of  those  whose  wages  are  included  in  what 
they  call  profits.  As  the  mechanism  of  social 
service,  business  comprehends  all  serviceable  work. 

Observe,  Doctor,  that  I  said  "serviceable."  I 
didn't  say  "useful."  A  good  deal  of  business,  a 
considerable  part  of  the  mechanism  of  social  ser- 
vice, is  not  useful.  That  is  to  say,  it  is  not  bene- 
ficial. But  it  is  all  serviceable.  Every  occupa- 
tion serves  some  general  desire;  if  it  didn't  it 
wouldn't  survive. 

Theft  come  into  that  category?  Of  course  not. 
Theft  serves  no  one's  desire  but  that  of  the  thief. 
His  customers  are  not  free  agents.  They  may 
hold  up  their  hands  meekly  enough  while  he 
"goes  through"  them,  but  they  have  no  desire  to. 
Not  only  is  he  not  useful  to  them,  but  he  is  not 
serviceable  to  them  either. 

And  what  is  true  in  that  respect  of  illegal  theft, 
is  true  also  of  all  forms  of  legal  theft — "monopo- 
lies" as  we  commonly  call  them.  The  monopolist 
gives  no  service — not  in  his  role  of  monopolist, — 
either  good  or  bad,  useful  or  vicious,  in  exchange 
for  what  he  gets.  He  may,  indeed,  in  connection 
with  his  monopoly,  render  service  in  some  degree. 
This  happens,  for  example,  when  water  is  sup- 
plied through  the  mains  of  a  water  monopoly. 
The  water  is  serviceable.  For  most  purposes  it 
may  also  be  useful.  But  all  that  the  monopolist 
gets  over  the  value  of  the  water  service,  he  gets 
by  force  of  his  monopoly,  and  without  giving  any- 
thing serviceable  in  exchange  for  it.  He  gets 
it  as  the  thief  gets  loot — by  coercion.  He  gets 


THE     MECHANISM  151 

it  because  the  law  creates  conditions  that  enable 
him  to  charge  all  the  traffic  will  bear  without  the 
restraints  of  competition.  That  is  to  say,  he 
serves  under  conditions  of  law  that  prevent  others 
from  serving  at  all,  or  else  compels  them  to  serve 
at  a  disadvantage.  He  has  the  advantage  either 
of  exclusive  service  or  of  privileged  service.  Con- 
sequently there  is  little  or  no  limit  to  what  the 
traffic  will  bear  in  his  case,  except  the  desire  of 
his  consumers.  They  must  come  to  his  terms  or 
go  without  that  kind  of  service.  His  price  is  not 
at  an  equilibrium  established  by  the  opposing 
forces  of  their  own  desires  and  the  desires  of 
others,  as  in  competition  or  co-operation;  it  is 
regulated  only  by  the  limits  of  their  desires  on 
the  one  hand  and  of  his  rapacity  on  the  other. 
He  holds  letters  of  marque  on  the  business  seas; 
and  in  so  far  as  his  prices  are  higher  than  others 
would  be  freely  willing  to  serve  for  were  they  al- 
lowed to,  his  income  is  on  a  par  with  the  income 
of  the  ordinary  thief.  It  is  legalized  loot,  and 
loot  is  loot  whether  legalized  or  not 

But  the  man  who  makes  or  sells  things  that 
many  of  us  would  call  useless,  or  even  vicious,  is 
nevertheless  engaged  in  business,  in  social  service, 
if  those  he  serves  are  free  to  accept  or  reject 
what  he  offers  them  in  exchange  for  what  he 
demands  of  them. 

You  and  I  know  people  who  denounce  the 
liquor  traffic  not  only  as  useless  but  as  vicious — 
and,  Lord  bless  us,  I  have  no  quarrel  with  them 
on  that  score, — but  whether  useful  or  injurious, 
the  liquor  traffic  is  serviceable  or  it  would  "go 
broke."  Then  there  are  others  who  feel  the  same 
way,  though  with  minor  intensity  and  less  reason 
it  may  be,  about  tobacco,  and  tea,  and  coffee,  and 
so  on.  They  may  be  right.  Possibly  all  these 
things  are  so  injurious  that  they  cannot  be  called 
useful.  I  do  not  dispute  it.  That  is  in  your  pro- 


152  SOCIAL,    SERVICE 

fessional  line  rather  than  in  mine.  But  so  long 
as  those  things  are  in  demand  for  consumption, 
they  are  serviceable  even  if  they  are  not  useful; 
and  the  making  and  dealing  in  them  is  a  social 
service,  a  business,  in  the  same  sense  that  the 
making  and  dealing  in  anything  else  is  a  social 
service  or  business.  Take  one  of  the  business 
men  at  Joseph's  restaurant,  for  instance,  one  of 
those  that  we  call  "waiters"  for  purposes  of  dis- 
tinction. He  may  not  be  as  useful  when  he  serves 
us  with  beer  as  when  he  serves  us  with  a  sand- 
wich— except  in  the  estimation  of  vegetarians, 
you  know,  if  the  sandwich  is  a  meat  sandwich — 
he  may  not  be  as  useful,  I  say,  but  he  is  just  as 
serviceable,  provided  we  have  voluntarily  asked 
him  for  the  beer. 

Mutuality,  Doctor,  mutuality,  that  is  the  key 
word  of  the  business  mechanism — mutuality  be- 
tween giver  and  getter,  so  that  each  giver  gets  what 
he  wants  to  get  for  what  he  gives,  and  each  getter 
gives  what  he  wants  to  give  for  what  he  gets. 
The  more  steadily  business  runs  in  that  direction, 
the  closer  does  it  approximate  to  the  natural  laws 
of  social  service;  the  farther  it  goes  in  the  oppo- 
site direction,  the  closer  does  it  approximate  to 
low-down  theft. 

A  person's  business  is  the  pursuit  or  occupa- 
tion by  means  of  which  he  helps  to  serve  others 
in  exchange  for  the  service  he  gets  from  others, — 
by  means  of  which,  to  fall  back  upon  the  vocabu- 
lary of  business,  he  gets  from  others  for  serving 
them  the  money  wherewith  he  buys  the  things 
he  wants  himself.  This  is  his  way  of  rendering 
social  service ;  it  is  that  part  of  the  mechanism  of 
social  service  with  which  he  comes  into  immediate 
contact  in  rendering  and  receiving  service.  And 
the  regulators  of  this  mechanism,  the  elements 
of  business,  are  those  fundamental  principles  of 
social  service  that  we  have  been  considering  in 


THE    MECHANISM  168 

our  friendly  talks,  and  which,  though  not  speci- 
fically distinguished  as  the  principles  of  any  par- 
ticular business,  are  the  necessary  conditions  of 
all  business. 

Yes,  we  are  competent,  too,  you  and  I,  to  con- 
sider the  elements  of  all  business.  It  is  true,  to 
be  sure,  that  every  occupation  comes  under  prin- 
ciples peculiar  to  itself.  Yours  and  mine  do. 
They  are  governed  by  technical  principles  that 
must  be  minutely  learned,  and  no  one  can  intel- 
ligently consider  these  technicalities  in  any  busi- 
ness but  his  own.  But  beneath  technicalities  are 
the  general  principles  of  all  industry,  of  all  social 
service,  of  all  business.  Any  one  of  intelligence 
may  grasp  these,  because  they  require  for  their 
mastery  clear  thinking  on  common  facts  rather 
than  minute  knowledge  of  technical  facts. 

Without  an  understanding  of  these  principles 
even  the  technically  skilled  are  at  a  disadvantage 
in  their  own  callings.  Did  you  never  read  Waldo 
Pondray  Warren's  "Thoughts  on  Business"  ?  They 
are  really  excellent.  And  nothing  in  the  whole 
collection  is  better  than  this  bit  of  advice  on 
learning  a  business :  "The  first  thing  to  acquire 
is  the  habit  or  disposition  of  looking  into  things. 
Get  a  bird's-eye  view  of  the  whole,  then  learn 
what  general  kinds  there  are,  then  the  component 
parts  of  each,  and  then  the  details  of  the  particu- 
lar part  you  need  to  use.  To  work  from  the  top 
downward  is  the  quickest  and  most  comprehen- 
sive way.  The  questions  of  What>  Where,  How 
and  Why— especially  Why— get  quickly  at  the 
heart  of  what  is  needful  to  know  about  any  phase 
of  a  business." 

Why,  Doctor,  business  is  simply  the  art  of 
adapting  means  to  ends  for  social  service.  Con- 
sidered in  detail  it  may  be  this  or  that  particular 
art, — as  farming,  mining,  manufacturing,  sea- 


154  t        SOCIAL     SERVICE 

manship,  railroading,  trading,  storekeeping,  bank- 
ing, and  the  great  variety  of  their  subdivisions; 
considered  in  general  it  is  the  correlation  of  all 
kinds  of  arts  which  tend  to  satisfy  individual  de- 
sires by  the  interchange  of  individual  services. 
Its  general  principles  are  those  elementary  prin- 
ciples of  social  service  that  we  have  already  for- 
mulated. You'll  recall  them  if  I  tab  them  off 
on  my  fingers. 

Let  my  thumb  remind  you  of  the  foundation 
principle  of  all,  the  law  of  human  nature  that' 
men  seek  to  satisfy  their  desires  with  the  least 
exertion.     This  is  the  social  service  law  of  the 
line  of  least  resistance,  don't  you  remember  ? 

Then  we  have  here  on  my  index  finger,  a  re- 
minder of  the  elementary  law  of  trade:  The  di- 
rection of  the  demand  for  service  determines  the 
character  of  the  supply  of  service;  or,  in  business 
phrase,  don't  you  see? — the  expenditure  of  money 
by  consumers  in  demand  for  commodities  deter- 
mines the  expenditure  of  money  in  business  for 
the  supply  of  commodities. 

Now  look  at  my  middle  finger  to  remind  you 
of  the  law  that  every  person  who  consumes  prod- 
ucts of  social  service,  and  who  pays  his  way  in 
the  world  with  service  of  his  own — don't  you 
forget  that,  Doctor,  for  we  are  dealing  now  only 
with  the  people  that  pay  their  way  with  their 
own  work,  and  not  with  parasites  whether  legal 
or  not,  not  with  any  class  that  pays  its  way  with 
other  people's  work,  classes  we  will  consider 
when  we  take  up  the  pathological  aspects  of  our 
subject — every  one  who  pays  his  own  way  with 
his  own  work,  I  repeat,  virtually  produces  the 
things  he  consumes  even  if  he  does  not  literally 
make  them. 

Don't  you  remember  how  we  agreed  that  the 
man  who  makes  shoe  soles  week  in  and  week  out, 
nothing  but  shoe  soles,  wouldn't  do  it  unless  he 


THE    MECHANISM  155 

could  trade  them  for  what  he  wanted  ?  And  don't 
you  recall  that  I  virtually  got  my  own  live-bait 
and  you  virtually  mailed  your  own  letters  that 
day  when  we  swapped  errands  in  the  mountains? 
You  will  find  this  an  important  elementary  les- 
son in  business;  for  it  means  that  every  one  who 
works  produces  his  own  wages,  and  what  is  more, 
that  he  produces  them  before  he  gets  them. 

Some  business  men  think  that  they  advance 
the  wages  of  their  employes  out  of  their  capital. 
Nonsense.  They  do  nothing  of  the  kind — no 
more  than  any  of  us  advances  to  another  any- 
thing out  of  our  capital  when  we  swap  our  money 
for  their  goods.  They  may  help  their  employes 
to  trade  their  wages  in  the  forms  in  which  they 
make  them  for  the  forms  they  really  want  to 
consume.  That  is,  they  may  help  them  to  liquefy 
their  wages,  so  to  speak;  but  employers  don't 
advance  workingmen  their  wages.  They  get  from 
their  workingmen  the  equivalent  of  money  before 
they  give  them  money.  Do  street  car  companies 
advance  conductors  their  wages?  Absurd?  Of 
course  it  is  absurd.  Street  car  conductors  pro- 
duce from  passengers  the  money  with  which  their 
wages  are  paid,  all  through  the  week,  and  they 
don't  get  their  wages  till  Saturday.  It  is  the  same 
with  other  workmen,  except  that  they  produce 
something  else  than  the  very  money  they  get  for 
their  wages. 

To  give  either  money  or  anything  else  for 
property  in  any  other  commodity  whatever,  or  to 
give  property  rights  in  a  choice  from  all  com- 
modities in  exchange  for  property  in  one  kind 
of  commodity,  as  we  do  when  we  give  money  for 
something  else,  is  not  to  advance  anything;  it 
is  simply  to  swap  one  thing  which  is  more  or 
less  desirable  for  another  thing  which  is  more  or 
less  desirable.  Take  that  shoe-sole  maker  again, 
for  illustration.  Haven't  we  found  that  his  em- 


156  SOCIAL    SERVICE 

ployer  advanced  him  nothing?  All  he  did  was 
to  rent  him  space  and  sell  him  leather  condition- 
ally, just  as  old  Sampson  rents  you  and  me  our  of- 
fices conditionally,  and  as  the  New  York  mer- 
chants used  to  sell  Alec  Howell  his  little  supply 
of  store  goods  conditionally.  Our  shoe-sole  maker's 
employer  sells  or  lends  sole  leather  to  the  shoe- 
sole  maker,  and  rents  him  floor  space  and  a 
machine,  upon  a  bargain  that  the  shoe-sole  maker 
will  turn  over  the  shoe  soles  he  produces  at  the 
end  of  the  week  at  a  stipulated  price,  which  both 
of  them  call  wages.  The  two  are  in  fact  joint 
owners  of  the  shoe  soles,  the  one  to  the  extent 
of  an  interest  that  constitutes  his  wages  for  turn- 
ing sole  leather  into  shoe  soles,  and  the  other  of 
the  rest.  This  is  not  quite  the  legal  aspect  of 
the  matter,  but  it  is  the  essence  of  it.  Legally, 
the  shoe-sole  maker  may  have  no  interest  in 
the  shoe  soles  he  produces;  but  essentially  he  is 
a  partner  or  co-operator  with  his  employer.  He 
may  not  realize  much  on  his  partnership,  but 
that  doesn't  alter  the  fact  that  he  works  as  a  part- 
ner, as  a  co-operator. 

Why,  now,  I  remember  me  that  there  was  a  case 
in  one  of  the  Western  courts,  Wisconsin,  I  think, 
which  decided  that  in  some  connections  this  very 
co-operation  is  recognized  legally.  It  was  a  case 
on  mechanics'  lien  law,  and  it  decided  that  a 
cook  in  a  logging  camp— just  a  cook,  mind  you, 
who  had  never  handled  an  ax  in  his  life  except 
to  kill  hens  for  pot  pie, — that  this  cook  who  cooked 
for  the  loggers  in  a  lumber  camp  was  thereby 
chopping  down  lumber.  "What  one  does  by  an- 
other he  does  himself,"  don't  you  see  ? 

But  to  come  back  to  our  shoe-sole  maker,  do 
you  suppose  that  his  employer  would  have  paid 
him  any  wages  if  he  had  done  nothing  with  the 
leather?  I  reckon  not.  Employers  pay  wages  for 


THE    MECHANISM  157 

product.  Whether  they  measure  them  by  time 
or  not,  it  is  product  and  not  time  that  they  buy. 
They  are  in  reality  buying  the  workman's  out- 
put, which,  in  the  first  instance,  is  his  property 
and  not  theirs.  The  fact  that  they  bargain  for 
it  in  advance  makes  no  essential  difference.  Even 
if  the  workmen  have  to  bargain  under  duress 
and  at  a  loss,  the  essential  character  of  the  bar- 
gain is  the  same,  namely,  a  bargain  for  the  own- 
ership of  goods  to  be  made. 

In  the  case  of  our  shoe-sole  maker  the  greater 
serviceableness  as  a  commodity  in  the  social 
service  market  of  the  soles  over  the  leather,  was 
the  property  of  the  shoe-sole  maker  the  instant  he 
did  the  work — his  wages,  which  he  himself  had 
made.  When  the  employer  gave  him  money  at 
the  end  of  the  week,  that  money  was  not  only 
not  an  advance  of  the  man's  wages,  but  was  not 
wages  at  all.  It  was  paid  after  the  commodity 
had  been  produced,  and  it  was  purchase  money 
for  a  commodity  just  as  truly  as  the  money  you 
paid  the  storekeeper  for  that  new  hat  of  yours 
was  purchase  money.  The  storekeeper  gave  up 
a  hat  of  his  own  to  get  your  money,  and  the  shoe- 
sole  maker  gave  up  a  shoe-sole  product  of  his 
own  to  get  his  employer's  money.  He  gave  up 
his  wages  in  their  original  form  for  money,  and 
with  the  money  he  bought  other  products;  and 
the  products  that  he  bought,  if  he  or  his  family 
consumed  them,  were  his  final  wages,  his  real 
wages,  the  things  he  had  worked  for. 

I'll  tell  you  what  it  is,  Doctor,  if  both  em- 
ployers and  workingmen  had  a  better  understand- 
ing of  this  middle  finger  law  of  social  service, 
this  law  that  every  one  who  pays  his  way  in  the 
world  with  his  own  work  makes  his  own  wages, 
if  both  had  a  better  understanding  of  that  law, 
both  would  be  better  business  men,  better  co- 
operators  in  social  service,  than  they  are. 


158  SOCIAL    SERVICE 

Going  now  to  the  third  finger,  let  us  have  that 
remind  us  of  competition,  which  we  talked  about 
the  last  time  we  met — mutuality  of  competition, 
you  know,  co-operative  competition,  emulation  if 
you  like  the  word  better;  and  not  the  jug-handled 
competition,  the  tooth-and-claw  competition,  the 
devil-take-the-hindmost  competition,  which  mon- 
opolistic conditions  have  produced.  Somebody 
has  called  competition  the  life  of  trade,  and  so 
it  is, — the  life  of  trade,  the  life  of  business,  the 
motor  force  of  the  mechanism  of  social  service. 
If  business  were  competitive  through  and  through, 
with  no  monopolies  to  disturb  the  free  flow  of 
social  service  interchanges,  everybody  would  get 
the  full  value  of  the  wages  he  earns.  Nobody 
would  have  any  "rake-off." 

But  that  thought  leads  on  to  pathological 
^considerations;  so  I'll  break  it  off  and  ask  you  to 
think  again  of  money  as  you  look  at  my  little  fin- 
ger. You  remember,  don't  you,  that  money  is 
only  a  medium  of  exchange,  and  its  terms  a  lan- 
guage of  values?  Well,  don't  forget  this,  for 
money  terms  constitute  the  dialect  of  the  busi- 
ness world,  and  money  is  its  fetish.  Business 
men  get  so  they  seldom  think  of  anything  except 
in  terms  of  money.  I  knew  a  business  man  once, 
and  you  knew  him  too — a  genuinely  good  man,  a 
man  who  contributed  liberally  to  his  church,  ac- 
cording to  his  means,  and  as  a  Christian  and  not  as 
a  mammonite  (and  they  don't  all  do  that,  do  they, 
Doctor?),  and  also  to  everything  else  in  which 
he  believed,  and  who  never  felt  that  he  was 
buying  his  pastor's  soul  when  he  helped  pay  his 
salary — I  knew  this  man  to  say  of  his  pastor 
once  that  in  his  preaching  he  always  gave  a  hun- 
dred cents  on  the  dollar.  You  see  our  friend 
was  so  accustomed  to  measuring  market  values 
that  he  couldn't  speak  of  spiritual  values  ex- 
cept in  dollar  terms, 


THE    MECHANISM  159 

Now  let  me  recapitulate,  for  these  things  must 
be  kept  in  memory  all  the  time.  The  uplifted 
little  finger  stands  for  money,  a  mere  business 
medium,  and  its  terms  a  language  of  business 
values.  The  uplifted  third  finger  stands  for 
free  competition,  the  motor  force  of  the  business 
mechanism.  The  middle  one  reminds  us  of  the 
business  law  that  every  worker  produces  his  own 
wages.  The  index  finger  stands  for  the  law  of 
demand  and  supply  in  business  interchanges.  The 
uplifted  thumb  represents  the  underlying  reason 
for  business,  which  is  the  natural  human  ten- 
dency to  seek  the  satisfaction  of  desire  with  the 
least  effort. 

These  elementary  principles  are  common  to  all 
kinds  and  grades  of  business,  and  without  an 
appreciation  of  their  value  the  technical  lawi 
of  particular  businesses  become  a  hotch-potch  of 
unrelated  formulas.  But  don't  forget,  Doctor, 
that  business  has  pathological  conditions.  If  you 
do,  you  will  find  yourself  quarreling  with  nat- 
ural laws,  either  denying  their  existence  or  else 
wrenching  them  out  of  shape — trying  to,  that  is, 
for  in  fact  you  can't  do  either — you  will  be  quar- 
reling with  natural  laws,  I  say,  instead  of  re- 
moving unnatural  obstructions  whenever  things 
go  askew,  if  you  forget  that  business  may  hare 
pathological  conditions.  Some  business  men, 
and  I  am  not  so  sure  that  I  couldn't  rightly  say 
most  business  men,  study  to  get  the  most  by 
least  effort,  not  by  improving  business  methods  in 
the  direction  of  the  general  good,  but  by  prey- 
ing upon  their  fellows.  Some  institutional — oh, 
bother,  here  I  am  again  talking  pathology  when 
we  are  still  on  the  health  side  of  our  subject 
The  fact  is  that  business  is  so  saturated  with 
monopoly  poisons,  the  business  mechanism  is  so 
clogged  with  monopoly  obstructions,  that  it  is 
difficult  to  ignore  what  I  have  called  its  pathology 


160  SOCIAL    SERVICE 

long  enough  to  get  a  clear  preliminary  apprehen- 
sion of  its  normal  processes.  But  it  is  possible, 
and  I  must  try  to  do  it,  although  I  hope  you  will 
be  interested  in  a  special  discussion  of  the  organic 
pathology  of  business  before  we  drop  the  subject. 

What  I  have  tried  to  do  to-day,  and  with  as  few 
departures  into  pathological  fields  as  I  could  help, 
has  been  to  consider  the  mechanism  of  social  ser- 
vice as  it  would  be  if  its  normal  processes  were 
undisturbed  by  fraud,  or  coercion,  or  oppression 
of  any  kind,  either  personal  or  institutional, 
either  criminal  or  legalized.  We  must  consider 
it  first  as  if  the  competitive  forces  were  free  to 
exert  equal  pressure  on  all  sides  of  every  swap, 
somewhat  as  the  air  does  on  all  sides  of  physical 
bodies  in  equilibrium.  If  we  do  that,  we  shall 
see  that  normal  business  is  the  social  service  art 
of  satisfying  the  desires  of  each  with  the  least 
effort  of  each,  and  shall  be  able  all  the  better  to 
understand  pathological  symptoms. 

This  art  comprehends  the  mechanism,  the  pro- 
cesses, the  movement,  the  orderly  activities,  of  the 
social  service  market,  of  which  I  have  frequently 
spoken  in  these  talks  of  ours.  As  it  revolves 
about  the  systematic  trading  of  objects  of  more 
or  less  general  desire,  I  am  going  to  ask  you  to 
let  me  talk  to  you,  when  we  meet  again,  about 
trading  and  its  profits;  and  after  that  about  the 
circles  of  trade;  and  then  about  credits  and  ac- 
counting; after  which  we  might  look  over  the 
mechanism  of  social  service  as  a  whole  for  disor- 
ders and  derangements  to  account  for  its  eccentric 
motions  and  defective  results.  Oh,  no ;  not  at  all ; 
no,  no,  I  don't  intend  to  talk  about  it  in  any  tech- 
nical way.  That  wouldn't  be  necessary  for  our 
purpose,  and  I  shouldn't  be  competent  if  it  were. 
But  we  could  talk  sensibly  about  the  uses  and 
general  characteristics  of  a  locomotive,  couldn't 
we,  without  knowing  the  difference  even  between  a 


THE    MECHANISM  161 

valve  and  a  piston  ?  So  we  can  talk  sensibly  about 
trade,  I  take  it,  without  knowing  a  thing  about 
particular  commodities,  or  values,  or  prices,  or 
qualities,  or  crops,  or  rates  of  exchange,  or  econo- 
mies, or  other  mysteries  peculiar  to  particular  bus- 
inesses. What  we  need  to  understand  is  the  gen- 
eral modes  of  trade  in  effecting  the  purposes  of 
business,  which  is  the  proper  shaping  and  con- 
venient placing  of  commodities  for  the  satisfaction 
of  human  wants  in  an  economical  manner. 


CHAPTER  VIII. 
Trading. 

Doctor,  do  you  remember  those  trips  "over  to 
town"  that  we  used  to  make  with  my  grandfather 
when  we  were  boys,  usually  in  the  old  truck  wagon, 
sometimes  on  top  of  a  moving  mountain  of  hay, 
and  in  the  truck  body  on  bob-sleds  when  sleighing 
was  good  ?  We  bothered  grandfather  a  good  deal 
with  our  irresponsibility  and  antics  on  those  trips, 
and  he  would  talk  about  us  afterwards  to  your 
father  down  in  the  shoe  shop,  don't  you  remember  ? 
as  "migcfoevous  young  imps."  But  he  liked  to 
have  us  with  him  all  the  same.  He  no  more 
wanted  to  miss  the  chance  than  we  did.  And 
don't  you  recall  what  he  used  to  say  he  made  those 
trips  for?  I  do,  perfectly.  He  would  say,  "I've 
got  to  go  over  to  town  to-morrow  to  trade;  may 
be  you  boys  want  to  go  along  ?"  May  be !  I  reckon 
we  wanted  to  go  along.  But  that  isn't  the  point. 
What  concerns  you  and  me  just  now  is  the  reason 
grandfather  gave  for  going.  He  went  "over  to 
town  to  trade." 

Now,  what  did  my  grandfather  mean  by  that? 
Why,  he  meant  that  he  was  going  to  take  to  town 
some  of  the  products  of  our  farm  and  swap  them 
for  other  social  service  products  gathered  and 
stored  there  from  all  over  the  world.  In  other 
words,  he  was  going  to  get  the  wages  our  folks 
wanted  and  had  earned,  by  exchanging  the  things 
they  had  made  for  that  purpose.  Sometimes  he 
took  over  a  load  of  hay,  at  other  times  a  load  of 
apples,  at  others  bags  of  grain,  once  in  a  while  corn 
on  the  cob.  And  now  and  then,  you  know,  grand- 


TRADING.  163 

mother  would  go  along  with  butter  and  eggs.  No 
doubt  you  remember  how  we  used  to  come  back 
with  West  India  sugar,  and  New  Orleans  molasses, 
and  New  England  codfish,  with  cotton  for  quilting 
and  muslin  for  shirts  and  sheets,  with  calico  and 
coffee  and  tea,  sometimes  with  a  bit  of  furniture 
for  the  parlor,  or  a  bolt  of  cloth  for  clothing,  and 
at  long  intervals  with  a  load  of  anthracite  coal  for 
the  sitting  room  fire.  Mind  you,  Doctor,  there 
had  been  trading  "over  to  town." 

Doesn't  the  recollection  of  those  trips  bring  up 
to  you  a  vision  of  the  vast  field  over  which  that 
trading  must  have  spread?  Can't  you  see  bold 
sailors  on  wild  seas,  and  brave  miners  at  work 
deep  underground?  Can't  you  imagine  the  iron 
horse  cutting  across  country  in  all  directions,  and 
the  competing  canal  boat  floating  slower  than  a 
snail's  trot  along  the  artificial  water  ways  that 
threaded  mountain  and  valley  ?  Don't  you  see  the 
black  slaves  on  Southern  plantations,  and  the 
white  serfs  in  European  fields?  Doesn't  it  make 
you  think  of  noisy  factories  and  busy  stores,  of 
thriving  towns  and  cities  of  wonderful  magnifi- 
cence? Doesn't  it  recall  the  wood  cuts  that  we 
used  to  dream  over  in  our  old  geography,  those 
wood  cuts  that  suggested  so  many  different  ways 
of  working,  all  so  wearisome  that  we  envied  no- 
body but  the  head  worker  who  sat  in  the  shade 
and  drank  something  cool  ?  No,  we  didn't  think 
then  of  what  was  involved  in  those  little  journeys 
to  town,  but  we  can  now.  Don't  you  see  that  they 
meant  trade,  trade,  trade — the  wide  world  over? 
When  grandfather  went  "over  to  town  to  trade," 
he  came  in  touch  with  the  social  service  of  the 
world.  As  a  social  servitor,  he  entered  into  eco- 
nomic intercourse  with  millions  of  other  workers 
— and  some  parasites. 

Farmers  do  their  trading  somewhat  differently 
now-a-days,  I  make  no  doubt,  than  when  you 


164  SOCIAL     SERVICE. 

and  I  used  to  go  to  town  with  grandfather  to 
trade;  but  not  any  differently  in  principle,  I  guess. 
No  matter  how  farmers  do  their  trading  now,  they 
still  trade  farm  products  for  a  share  of  the  big 
world's  products  from  out  beyond  their  farms. 
That  is,  they  swap  their  own  social  service  for 
the  social  service  of  others,  just  the  same  to  all 
intents  and  purposes  as  my  grandfather  did  when 
he  took  us  with  him  "over  to  town  to  trade."  And 
they  do  it  now  at  stores,  too,  just  as  he  did. 

May  be  the  stores  aren't  run  in  quite  the  same 
way  in  all  their  details,  but  they  are  stores  all 
right  enough.  About  the  only  difference  is  that 
grandfather's  trading  was  more  a  matter  of  direct 
barter  than  the  trading  of  farmers  now.  He 
traded  his  hay  at  the  railroad  station  for  coal,  his 
apples  at  the  distillery  for  cider,  his  grain  at  the 
flour  and  feed  store  for  flour  and  feed,  or  at  the 
general  store  for  groceries  and  other  household  sup- 
plies ;  and  with  her  butter  and  eggs,  grandmother 
bought  calico  and  muslin  and  coffee  and  tea  of 
Slim  Jim  Pulsifer  from  across  the  swamp.  You 
remember  Jim.  He  was  ambitious  to  be  a  mer- 
chant, and  had  become  a  regular  store  clerk  who 
worked  now  without  taking  off  his  coat.  He  had 
got  to  be  quite  genteel,  don't  you  know  ?  and  would 
hand  out  a  stick  of  candy  to  you  and  me  with 
real  mercantile  grace.  None  of  those  old  store 
swaps  were  exact  offsets,  to  be  sure,  but  mutual 
accounts  were  kept,  and  at  settlement  time  there 
was  seldom  enough  difference  either  way  to  make 
it  worth  while  to  do  more  than  carry  the  balance 
over  to  the  next  year.  There  is  doubtless  more 
specialization  now  in  storekeeping  in  some  re- 
spects, and  more  generalization  in  others,  and 
mutual  accounts  may  be  much  less  common,  while 
cash  payments  either  with  money  or  checks  are  the 
regular  thing.  But  in  principle,  don't  you  see? 
trading  goes  on  as  it  always  has  since  social  service 


TRADING.  165 

ushered  in  the  dawn  of  civilization,  and  as  it  al- 
ways will  while  social  service  lasts. 

Some  way,  some  how,  some  where — if  not  "over 
to  town,"  then  at  the  village,  or  the  hamlet,  or 
in  the  barn,  or  by  the  roadside,  or  "down  to  the 
city,"  or  across  the  street,  or  around  the  corner, 
and  if  not  by  direct  barter  then  by  some  form  or 
other  of  buying  and  selling  and  incidentally  of 
giving  credit  and  taking  credit — in  some  such 
way,  the  social  servitors  of  the  world  will  always 
trade  their  various  specialties  one  with  another, 
paying  tribute  in  "surplus"  service  to  social  para- 
sites if  they  have  to.  But  tribute-paying  is  patho- 
logical, you  know,  and  we'll  pass  it  for  the  pres- 
ent, with  only  that  casual  allusion.  Such  differ- 
ences, Doctor,  as  have  occurred  or  may  yet  occur 
you  will  find  upon  examination  to  be  merely  im- 
provements in  trading,  and  not  substitutes  for  it. 
Trading  is  natural  with  mankind — as  natural  as 
nest  building  with  birds  or  dam  building  with 
beavers.  Man  is  the  trading  animal,  you  know; 
and  as  he  is  also  the  inventive  animal,  he  is  for- 
ever improving  his  trading  methods  as  he  im- 
proves everything  else. 

And  so  we  have  systematic  trading,  constantly 
developing  in  its  methods  along  the  lines  of  great- 
er and  greater  economy  in  accordance  with  the 
law  we  have  talked  about  and  tried  to  remember  by 
associating  it  with  my  uplifted  thumb — the  law 
that  man  seeks  to  satisfy  his  desires  with  the  least 
exertion.  Not  systematic  according  to  artificial 
rule  and  formula,  you  observe,  like  grandfather's 
pernicious  system  of  getting  up  at  daylight  and 
going  to  bed  at  dark,  nor  the  system  of  eating 
meals  at  a  particular  hour,  or  of  taking  your  toddy 
at  "just  about  this  time  of  day"  if  you  are  a 
toddy  taker ;  but  systematic  as  a  sort  of  automatic 
result  of  the  interplay  of  individual  desires  for  so- 
cial service  groping  for  the  natural  line  of  least 


166  SOCIAL     SERVICE. 

resistance,  seeking  out  the  path  of  greatest  econ- 
omy. Trading  was  more  systematic — that  is,  it 
was  more  economical — when  grandfather  used  to 
take  us  "mis,chee\ous  imps"  with  him  on  his  trips 
"to  town  to  trade,"  than  it  had  been  when  he  was 
himself  "a  misc/ieevous  imp ;"  and  now  it  is  more 
systematic,  more  economical,  than  ever;  but  all 
the  time  it  has  been  essentially  the  same  thing — 
voluntary  interchange  of  individual  services  in  the 
social  service  market. 

When  grandfather  went  "to  town  to  trade,"  he 
did  his  trading  at  stores.  He  didn't  call  all  his 
trading-places  stores,  though ;  one  was  a  coal  yard, 
another  a  distillery,  another  a  tannery.  But  stores 
is  what  they  all  were  in  fact,  even  though  in  some 
respects  they  were  also  something  else.  For  things 
were  stored  there  in  readiness  for  delivery  as 
needed.  To-day  some  stores  are  called  shops, 
though  nothing  is  shaped  in  them  and  they  are 
just  stores.  Bob  Blissert,  you  remember,  used  to 
keep  a  tailoring  shop.  He  made  clothes.  But  he 
didn't  keep  a  clothing  store.  You  couldn't  get  a 
suit  of  clothes  of  him  without  being  specially 
measured  and  waiting  two  or  three  weeks  until  he 
had  shaped  them  in  his  shop.  But  Baldwin  down 
there  at  Canal  and  Broadway,  he  kept  a  clothing 
store.  You  could  go  into  his  place  at  any  time, 
and  walk  out  in  a  few  minutes  with  a  finished  suit 
of  clothes  under  your  arm  or  on  your  body. 

A  store  is  a  place  where  social  service  products 
are  gathered  in  readiness  for  convenient  and  im- 
mediate delivery.  There  are  many  kinds,  as  you 
know — grocery  stores,  clothing  stores,  furnishing 
stores,  hardware  stores,  department  stores,  and 
so  on — but  they  all  classify  into  two  general 
kinds:  wholesale  stores  and  retail  stores. 

Wholesale  stores  are  intermediate  reservoirs  of 
unfinished  commodities  in  various  stages  of  finish- 
ment,  from  the  first  stage  beyond  raw  material, 


TRADING.  167 

like  a  wool  warehouse  or  a  grain  elevator,  to  the 
commodity  that  is  so  far  finished,  like  coats  or 
loaves  of  bread,  as  to  need  nothing  more  done  to 
it  than,  first,  to  be  transported  to  a  retail  store 
convenient  to  the  consumer,  and,  second,  to  be 
delivered  to  the  consumer  when  he  calls  to  buy 
it.  The  retail  store  is  to  the  wholesale,  somewhat 
as  the  faucet  in  your  house  is  to  the  water  reser- 
voir. I  have  said  that  before,  but  it  is  worth  say- 
ing again.  It  is  a  place  for  the  release  of  com- 
modities that  are  finished  in  every  particular  ex- 
cept delivery. 

It  was  at  retail  stores  that  grandfather  did  his 
swapping  when  he  went  "over  to  town  to  trade" 
his  produce  for  his  wages ;  and  it  is  at  retail  stores 
always  as  a  rule  that  social  servitors  collect  their 
wages  by  buying  the  things  they  want  for  con- 
sumption with  the  things  they  have  made,  or  their 
share  in  the  things  they  have  helped  make,  in 
production. 

The  history  of  the  evolution  of  the  retail  store? 
Oh,  I  don't  know,  Doctor,  as  anybody  can  tell 
you  that.  I  doubt  if  any  one  can  without  pretend- 
ing to  know  a  good  deal  more  than  he  knows.  But 
the  probabilities  are  very  simple. 

Evidently  storekeeping  is  not  a  primary  occu- 
pation. If  each  man  supplied  all  his  own  wants 
by  the  direct  application  of  his  own  labor  to  his 
natural  environment,  he  would  have  no  use  for 
any  storekeeper  besides  himself  nor  for  any  other 
store  than  his  own  cave.  Storekeeping  is  one  of 
the  functions  that  are  generated  by  the  human 
tendency  to  trade;  it  is  an  organ  of  the  social- 
service  organism. 

When  men  specialize  their  work,  each  making 
only  part  of  the  things  he  needs,  trade  is  abso- 
lutely necessary.  There's  no  doubt  about  its  neces- 
sity, is  there  ?  even  if  we  dispute  its  being  a  human 
pharacterjstic.  If  one  man  who  wants  food,  cloth- 


168  SOCIAL,     SERVICE. 

ing  and  shelter,  and  now  and  then  something  in 
the  way  of  luxury,  devotes  himself  wholly  to  food- 
making,  or  to  a  special  kind  of  food-making,  or 
to  a  special  stage  of  a  special  kind  of  food-making, 
the  only  way  in  which  he  can  obtain  all  the  kinds 
of  food  he  wants,  as  far  finished  as  he  wants  them, 
and  at  the  place  at  which  he  wants  them,  together 
with  the  clothing  and  shelter  and  luxuries  that 
he  also  wants,  is  by  trading  his  own  products  in 
large  quantities  for  the  other  things  in  small  quan- 
tities. Isn't  that  true?  Very  good.  Inasmuch, 
then,  as  civilized  work  is  intensely  specialized, 
each  worker  finishing  nothing,  but  contributing 
over  and  over  in  a  special  way  to  finishing  some- 
thing, trade  is  necessarily  a  universal  phenomenon 
of  civilized  life. 

We  all  live  by  trading,  don't  we  ?  And  but  for 
trading  we  should  be  living  pretty  primitive  lives, 
shouldn't  we?  And  the  more  extensive  and  in- 
tensive our  trading,  the  more  effective  our  econo- 
mies and  consequently  the  possibilities  of  civiliza- 
tion. Isn't  that  so?  You  agreed  to  it  at  the 
time  we  reflected  upon  the  lesson  of  our  swapping 
of  letter  carrying  for  live-bait  fetching  when  we 
were  on  our  vacation  in  the  mountains. 

But  the  natural  conditions  of  trading  do  not 
permit  each  maker  of  one  thing  or  part  of  one 
thing  to  trade  his  product  directly  with  the  mak- 
ers of  the  products  he  desires  for  consumption. 
Various  devices,  therefore,  come  into  use  to  facili- 
tate trading;  and  storekeeping  is  the  most  funda- 
mental logically,  whether  it  was  the  first  histor- 
ically or  not.  The  storekeeper  makes  a  business 
of  collecting  at  one  point  in  a  neighborhood  all 
the  different  kinds  of  things,  wherever  in  the 
world  they  may  be  made,  that  are  ordinarily  re- 
quired by  the  people  of  that  neighborhood.  And 
in  this  all  sorts  of  transporters  help  him.  He  col- 
lects those  things  at  that  point,  in  the  quantities 


TRADING.  169 

and  at  the  seasons  that  best  enable  him  to  accom- 
modate local  wants ;  and  he  trades  them  upon  de- 
mand for  the  limited  variety  of  things  which  the 
people  of  that  neighborhood  make. 

That  is  the  way  it  was  done  in  grandfather's 
day,  you  know;  and  if  it  is  not  done  exactly  so 
now,  you  will  find  that  the  difference  is  only  one 
of  specialization.  That  is,  whereas  the  storekeeper 
"over  to  town"  in  grandfather's  day  took  produce 
in  exchange  for  store  goods,  the  business  is  so 
broken  up  now  that  the  buying  of  produce  is  done 
by  one  kind  of  storekeeper,  and  the  selling  of  store 
goods  is  done  by  another.  One  department  of 
trade  has  been  divided  into  two.  This  is  the  more 
usual  form,  though  truck  stores  survive  in  places. 
So  storekeepers  who  sell  store  goods  may  take 
money  now,  or  checks,  instead  of  produce  from 
customers,  leaving  the  customers  to  get  their 
money  by  selling  their  produce  to  buyers.  But 
this  is  all  matter  of  form,  and  form  makes  no  dif- 
ference. The  essence  of  the  thing  is  that  the 
world-wide  system  of  storekeeping  enables  the 
makers  of  particular  things  or  particular  parts  of 
particular  things  anywhere,  to  trade  them  every- 
where for  the  things  they  want  to  consume.  It  is 
a  system,  that  is  to  say,  which  brings  the  whole 
civilized  world  together  in  trade. 

Such  are  the  uses  of  storekeeping,  and  mighty 
good  uses  they  are,  too,  Doctor,  barring  the  tak- 
ing out  of  tribute  through  the  creeping  in  of 
monopoly.  But  that  is  pathological,  so  let  us  go 
on  for  the  present  with  storekeeping  as  it  would  be 
were  there  no  such  disorder. 

If  we  imagine  a  hamlet  at  a  distance  from  a 
trading  center,  we  can  see  that  as  its  needs  grow 
a  retail  store  will  come  there.  It  will  come  under 
the  law  of  human  nature  that  we  ought  to  be 
pretty  familiar  with  by  this  time — the  law  of  the 
line  of  least  resistance,  you  know,  that  we  have  as- 


170  SOCIAL     SERVICE. 

sociated  with  my  uplifted  thumb:  the  law  that 
men  seek  the  satisfaction  of  their  wants  with  the 
least  effort ;  the  law  of  human  economy.  At  first 
everybody  would  have  to  go  a  long  distance  "over 
to  town  to  trade,"  and  that  would  require  so  much 
effort  that  neighbors  would  fall  in  the  way  of  do- 
ing trading-errands  "over  to  town"  for  one  an- 
other. Then  they  might  join  in  hiring  some  one 
especially  to  do  these  errands  for  them — a  carter, 
say — when  the  hamlet  had  grown  enough  to  make 
that  device  economical.  After  a  while  the  carter 
might  get  into  the  habit  of  buying  some  of  the 
more  staple  articles  which  from  experience  he 
found  that  the  little  community  most  certainly 
would  demand,  and  keep  them  in  store,  selling 
them  as  they  were  wanted  and  charging  a  profit, 
instead  of  going  for  them  especially  and  charging 
wages  for  the  trip.  The  profit  without  the  trip 
would  pay  him  better  than  wages  for  the  trip,  and 
yet  it  would  cost  the  consumers  less.  Somewhat 
after  that  fashion,  Doctor,  I  take  it,  would  be  the 
beginning  of  the  retail  store  in  that  community. 
Of  course  the  details  of  its  evolution  might  be 
very  different.  A  peddlar,  for  instance,  might  see 
the  opportunity  for  serving  that  community  better 
and  with  more  profit  to  himself  by  setting  up  a 
retail  store  there  and  keeping  goods  constantly  on 
hand  ready  for  consumption,  than  by  coming 
•around  with  such  goods  at  intervals.  Any  one  of 
a  thousand  other  possibilities  might  produce  the 
result,  but  the  result  would  be  essentially  the 
same.  Whatever  the  details  of  the  evolution,  the 
store  itself  would  come  in  response  to  some  of 
the  laws  we  have  already  been  over  and  which  I 
enumerated  in  a  kindergarten  way  on  my  fingers 
to  help  you  remember  them — see:  men  seek  to 
satisfy  their  desires  with  least  exertion — thumb; 
the  direction  of  demand  for  service  determines  the 
character  of  supply  of  service — index  finger;  com- 


TRADING.  171 

petition  discloses  and  measures  this  demand  better 
than  a  committee  or  a  mass  meeting  could,  and 
with  greater  or  less  accuracy  and  fairness  all 
around  as  competition  is  more  or  less  free — skip 
the  middle  finger  and  think  of  the  third. 

As  soon  as  it  is  easier,  more  economical,  for 
any  community  as  a  whole  to  buy  of  a  local  store- 
keeper than  to  go  or  send  "over  to  town  to  trade," 
paying  him  a  profit,  or  higher  price  than  he  pays 
"over  to  town,"  or  "down  in  the  city,"  just  so 
soon  will  the  retail  store  come  into  that  commun- 
ity in  the  natural  order.  It  may  come  sooner, 
through  misjudgment  or  from  cut-throat  compe- 
tition ;  it  may  not  come  so  soon,  through  misjudg- 
ment or  obstruction.  But  as  water  runs  down 
hill,  even  if  it  has  to  surmount  dams  to  do  it  and 
is  thereby  delayed,  so  will  the  retail  store  come 
to  a  community  that  needs  it  as  matter  of  econ- 
omy. 

In  those  circumstances  the  carrier,  the  peddlar, 
or  some  one  else  who  infers  potential  demand  and 
its  possibilities  of  profit,  will  be  spurred  on  by 
competitive  impulses  to  start  the  store.  When  he 
has  started  it,  he  will  of  course  charge,  for  the 
goods  he  buys  and  stores,  "all  the  traffic  will 
bear."  Everybody  does  that,  you  know.  But  how 
much  would  the  traffic  bear  if  competition  were 
really  and  truly  free,  if  there  were  no  monopolies  ? 
Not  more  than  enough  to  pay  him  as  well  for  his 
service  as  any  one  else  equally  competent  and 
faithful  would  be  willing  to  render  that  service 
for?  If  he  attempted  to  gouge  the  community, 
free  competition  would  drive  him  out,  and  he 
ought  to  be  driven  out.  But  if  he  served  the  com- 
munity well,  no  one  would  set  up  a  competing 
store  until  the  community  had  real  use  for  more 
than  one — if  competition  were  free,  mind  you, 
Doctor,  if  it  were  free. 

Of  couree,  if  competition  were  not  free,  if  mo- 


172  SOCIAL    SERVICE. 

nopolies  interfered  with  the  free  flow  of  social 
service  as  dams  may  with  a  free  flow  of  water, 
there  would  be  disarrangement  of  the  relation  of 
production  to  consumption.  In  that  case  fellows 
on  the  lookout  for  a  chance  at  cut-throat  compe- 
tition in  storekeeping  would  break  in  destruc- 
tively, just  as  men  out  of  work  and  looking  for 
chances  for  cut-throat  competition  at  getting  a 
job — "scabbing,"  I  think  is  what  this  is  called — 
are  all  the  time  doing.  But  in  the  absence  of  mo- 
nopoly, free  competition  would  regulate  the  mat- 
ter to  the  benefit  of  all. 

Yes,  Doctor,  I  did  say  "profits,"  and  I  am 
very  glad  to  have  you  call  my  attention  to  it.  I 
guess  you've  been  talking  again  with  our  socialist- 
ic friend  down  the  street.  He  is  a  good  fellow, 
as  you  say,  and  he  and  I  do  agree  on  a  good  many 
points;  but  he  is  very  much  addicted  to  confus- 
ing the  diverse  meanings  of  that  much  abused 
word,  "profits."  And  really  there's  no  worse 
abused  word  in  the  dictionary.  One  can  never 
safely  use  this  word  for  purposes  of  exact  ex- 
pression without  explaining  precisely  what  he 
means  by  it,  and  then  sticking  to  his  definition. 

Frequently  "profits"  is  used  to  mean  "rake-off," 
and  nothing  but  "rake-off."  Persons  who  use 
it  in  that  sense  denounce  profits,  as  our  social- 
istic friend  with  whom  you  have  been  talking 
does.  So  should  I  denounce  profits  if  I  used 
the  word  in  that  sense.  But  those  who  use  it  so 
forget,  just  as  our  friend  habitually  does,  to  keep 
their  use  of  it  within  the  bounds  of  the  objec- 
tionable meaning  they  give  to  it.  They  will  calm- 
ly condemn  the  profits  of  the  storekeeper,  or  the 
manufacturer,  along  with  the  profits — well,  of  the 
land  speculator,  for  instance — all  in  the  same 
breath.  Yet  the  profits  of  the  land  speculator 
are  nothing  but  "rake-off."  He  doesn't  do  a 
solitary  thing  to  earn  his  profits — not  as  a  land 


TRADING.  173 

speculator.  In  this  capacity  he  is  no  more  ser- 
viceable than  a  poker  player.  But  that  isn't  true 
of  the  storekeeper  as  such,  not  altogether  at  any 
rate,  nor  of  the  manufacturer  as  such.  They  do 
earn  at  least  some  portion  of  their  profits. 

This  looseness  in  the  use  of  the  word  "profits" 
is  largely  the  fault  of  political  eonomists 
who  put  all  profits  in  one  category.  Whether  the 
profits  are  earned,  in  whole  or  in  part  by  ser- 
viceable work,  or  are  altogether  a  "rake-off/'  they 
make  no  distinction.  This  comes  probably  from 
the  disposition  of  economists  to  adopt  for  exact 
economic  analysis  the  undistributed  terms,  and  the 
loose  habits  of  thought  as  well  as  speech,  of  the 
business  man.  The  term  "profits"  is  a  business 
term.  It  includes  some  kinds  of  earnings  and 
some  kinds  of  business  "rake-offs."  For  mere  busi- 
ness purposes,  where  no  distinction  is  made,  er 
intended  to  be  made,  or  necessary  to  be  made,  be- 
tween what  is  earned  and  what  is  only  a  legal  ap- 
propriation, the  word  serves  well  enough;  but  in 
economic  analysis,  or  in  the  forum  of  morals,  or 
in  connection  with  legal  or  political  reform,  the 
two  kinds  of  things  which  the  word  "profits"  in- 
terchangeably includes  and  messily  confuses,  must 
be  clearly  distinguished.  We  must  separate  so 
much  of  "profit"  as  is  truly  earnings  for  service, 
from  so  much  as  is  merely  "rake-off."  Of  course 
you  can't  put  into  the  same  category,  in  eco- 
nomic analysis,  two  things  so  different  as  earn- 
ings and  "rake-offs,"  and  then  expect  to  reach 
sane  conclusions.  The  hunter  may  talk  of  "wild 
game,"  but  that  won't  do  for  the  naturalist;  so 
the  business  man  may  talk  of  "profits,"  but  the 
economist  and  the  economic  reformer  must  be 
more  precise. 

No  one  has  the  right  to  use  the  word  "profits" 
in  the  sense  of  a  "rake-off"  without  saying  so,  nor 
then  without  confining  his  use  of  it  to  "rake-offs." 


174  SOCIAL    SERVICE. 

Why  not?  Because,  as  commonly  used  in  busi- 
ness, the  word  "profits"  means  merely  the  differ- 
ence between  what  you  sell  commodities  for  and 
what  you  have  bought  them  for;  and  in  that 
sense  it  includes  not  only  the  "rake-off,"  if  there 
is  any,  but  also  the  value  of  the  service  which 
the  storekeeper  renders.  We  don't  want  to  ob- 
ject to  the  value  of  a  service  as  a  "rake-off,"  do 
we,  Doctor? 

The  New  York  Herald  was  once  guilty  of  a  gross 
misuse  of  the  word  "profits"  in  connection  with 
a  strike  of  retail  newspaper  dealers,  mostly 
newsboys.  The  Herald  had  reduced  its  retail 
price,  but  not  its  wholesale  price,  and  the  deal- 
ers boycotted  it.  They  said  it  wouldn't  pay  them 
to  handle  the  paper  for  the  trifling  profit  that  re- 
mained. Now,  what  do  you  suppose  the  Herald 
replied  to  that?  Truly,  it  is  to  laugh !  The  Her- 
ald seized  upon  the  loose  use  of  the  word 
"profit"  which  the  newsdealers  had  fallen  into, 
and  argued  that  the  dealers'  profits  had  been  ex- 
orbitant because  they  were  at  the  altitude  of 
80  per  cent.  How  do  you  suppose  the  Herald 
showed  this?  Why,  it  contrasted  what  the  news- 
dealers had  paid  for  Heralds  with  what  they  had 
sold  them  for,  and  deducted  from  the  difference 
some  cash  outlays  for  newstands,  etc.  But  it 
left  out  the  item  of  the  newsdealers'  earnings.  Yet 
they  must  have  earned  something  in  placing  Her- 
alds in  the  houses  of  newspaper  readers  every 
morning  through  all  the  changing  seasons  of  the 
year  and  before  the  readers  were  out  of  their 
beds.  The  truth  is  that  the  80  per  cent  profit 
was  wages  for  work,  every  penny  of  it,  and  not 
very  good  wages  either. 

If  that  profit  had  been  more  than  wages  for 
work,  and  competition  had  been  free  in  all  lines 
of  social  service,  newsdealers  would  have  had 
to  sell  the  papers  for  less  than  they  did.  "Rake- 


TRADING.  175 

offs"  don't  keep  if  competition  has  free  play.  No 
one  can  long  get  more  than  his  service  is  worth, 
when  competition  is  free.  Nor  will  he  long  take 
less.  So  the  profits  of  the  newsdealers  in  that 
case  must  have  conformed  to  their  earnings,  as 
profits  always  must  unless  competition  is  'ob- 
structed by  some  form  of  monopoly.  Let  me  in- 
dulge in  an  arbitrary  illustration.  The  Herald 
case  suggests  it. 

Suppose  you  want  a  newspaper  some  morn- 
ing in  a  neighborhood  where  there  happens  to 
be  no  newspaper  service.  You  meet  a  boy  and 
ask  him  to  go  to  the  nearest  newspaper  store 
he  knows  of  and  buy  you  one.  You  give  him  two 
cents  to  buy  the  paper  with,  and  when  he  brings 
you  the  paper,  another  cent  for  his  service.  Has 
he  had  any  rake-off?  Of  course  not.  Yet  a 
two-cent  paper  has  cost  you  three  cents. 

Suppose  now  that  the  boy,  finding  that  you 
want  this  service  regularly  every  morning,  buys 
the  paper  with  his  own  money  and  before  you  ask 
him  to,  and  then  sells  it  to  you  as  you  come  out 
of  your  house.  He  has  paid  two  cents  for  it, 
and  he  charges  you  three — a  profit  of  one  cent. 
Where  is  his  rake-off  in  that  profit?  There  isn't 
any,  is  there? 

But  go  a  little  further.  Suppose  he  discovers 
that  a  lot  of  other  people  in  your  neighborhood 
are  put  to  more  or  less  inconvenience,  just  as 
you  were,  by  having  to  resort  to  uncertain  devices 
to  get  a  morning  paper,  and  he  goes  to  the  news- 
paper store  and  says,  "See  here,  Mister,  how 
much'll  you  charge  me  for  papers  if  I  take  a  hun- 
dred every  day?"  and  the  storekeeper  replies,  "A 
cent  apiece."  Then  the  boy's  profit  would  be 
two  cents,  wouldn't  it?  for  of  course  he'd  charge 
you  three  cents  as  before,  being  quite  alive,  even 
if  he  is  a  boy,  to  the  business  principle  of  charg- 
ing "all  the  traffic  will  bear."  But  what  "rake- 


176  SOCIAL    SERVICE. 

off"  would  there  be  in  that  two-cents  profit  that 
there  wasn't  before  in  the  one-cent  profit? 

Yes,  Doctor,  you  are  quite  right;  if  a  profit  of 
two  dollars  a  hundred  were  really  excessive  for 
handling  those  papers,  then  there  would  be  a 
"rake-off"  in  the  profit.  But  if  there  were,  how 
long  could  the  boy  continue  to  get  it  unless  he 
had  a  monopoly  of  the  supply?  Why,  just  long 
enough,  at  the  longest,  for  other  boys  equally 
able  to  render  the  service  and  equally  faithful 
in  rendering  it,  to  find  out  how  rich  a  "rake- 
off"  there  was  in  that  profit — if  competition  were 
free,  Doctor;  always  remember  that  third-fin- 
ger point:  if  competition  were  free.  Those  oth- 
er boys  would  compete  until  there  was  no  rake-off 
left  in  the  profit ;  until  nothing  was  left  in  it  but 
pay  for  the  service. 

No,  that  wouldn't  be  forcing  wages  down, 
either.  To  eliminate  a  "rake-off"  is  not  to  lower 
wages.  To  be  sure  this  competition  of  the  boys 
would  tend  to  reduce  profits  on  delivering  news- 
papers; but  it  wouldn't  reduce  them  below  the 
earning  point — not  unless  competition  were  ob- 
structed by  some  monopoly  or  other.  Wages  can- 
not long  be  reduced  below  the  earning  point,  no 
more  than  dinners  can  long  be  reduced  below 
the  living  point,  unless  anti-competitive  condi- 
tions prevail — that  is,  monopolistic  conditions 
which  obstruct  opportunities  for  social  service, 
thereby  making  a  glutted  labor  market,  and  creat- 
ing a  class  of  parasites  who  flourish  upon  legal- 
ized "rake-offs." 

If  a  large  proportion  of  people  are  able  and 
willing  to  serve  in  the  social  service  market,  yet 
are  prevented  by  monopolistic  conditions,  they 
will  work  for  a  bare  living  rather  than  starve; 
and  thereby,  through  cut-throat  competition,  they 
will  reduce  wages  below  the  earning  point,  and 
leave  a  surplus  for  "rake-offs."  But  if  social 


TRADING.  177 

service  conditions  are  not  monopolistic,  but  are 
freely  competitive,  no  one  will  compete  with  an- 
other unless  the  other  is  getting  profits  which 
contain  a  "rake-off"  over  and  above  earnings. 

Do  I  think  that  ordinary  wages  are  up  to  earn- 
ings now?  Indeed,  I  do  not.  If  they  were, 
how  could  so  many  people  be  living  in  luxury 
so  long  without  earning  much  of  anything?  Some 
one  has  to  earn  that  luxury.  But  this  is  patho- 
logical. Let  us  go  on  with  our  consideration  of 
the  normal. 

Under  normal  circumstances  the  thing  which 
the  word  "profit* '  identifies  in  business  nomen- 
clature, is  evidently  a  form  of  compensation  for 
work — compensation  for  a  service  of  more  or 
less  uncertain  result.  Being  for  an  uncertainty, 
this  compensation  would  be  high  with  a  success- 
ful outcome,  of  course,  for  it  would  be  nothing 
with  an  unsuccessful  outcome. 

If  everybody  who  engaged  in  social  service  took 
his  pay  according  to  results,  there  would  be  no 
such  thing  in  business  contemplation  as  "profit." 
But  some  men  would  prefer  even  under  the 
most  normal  conditions — I  think  that  I  should 
— to  bargain  in  advance  for  their  share;  while 
others  would  be  willing — I  think  old  Sampson 
would — to  buy  those  shares  in  advance  and  take 
chances.  The  incentive  to  the  one  kind  of  per- 
son would  be  the  certainty  of  result  to  them, 
though  their  net  earnings  might  turn  out  to  be 
lower;  the  incentive  to  the  others  would  be  an 
expectation  of  getting  something  out  of  the 
speculation — the  gambling  spirit  in  us,  you 
know.  And  yet  it  might  not  be  altogether 
due  to  the  gambling  spirit.  An  expert  in  some 
kinds  of  production  might  want  to  bargain  in 
advance  with  all  the  help  he  needed — buying  out 
their  shares  in  the  expected  result — so  as  to  be 
free  to  utilize  his  expert  abilities  without  dicta- 


178  SOCIAL    SERVICE. 

tion  from  less  competent  persons.     And  whafa 
the  harm,  so  long  as  there  is  no  coercion? 

If  general  social  service  conditions  are  so  far 
pathological  that  the  sellers  of  service  have  to 
sell  in  advance  whether  they  want  to  or  not,  then 
you  have  a  pernicious  "profit"  and  "wages"  sys- 
tem,— a  labor  class  exploited  and  an  employing 
class  exploiting.  But  if  both  buyers  and  sellers 
of  labor  power  were  really  and  fully  free  to  bar- 
gain on  equal  terms,  there  could  surely  be  no 
harm  to  anybody  in  the  system  of  bargaining  for 
service  in  advance  of  results,  and  there  might  be 
a  good  deal  of  benefit  in  it  to  everybody.  It  would 
make  a  "wages"  and  "profit"  system,  to  be  sure, 
but  not  a  pernicious  one. 

May  be  I  can  illustrate  the  whole  matter  with 
another  reminiscence.  You  remember,  don't  you, 
that  happy  day  in  the  long  ago  when  our  farm 
hands  and  some  of  our  neighbors  went  over  to 
Green's  Pond  together  to  fish  with  a  net,  and 
took  you  and  me  along  to  drive  the  fish?  Didn't 
we  thrash  through  the  water  though;  and  wasn't 
it  fun  to  be  in  there  with  our  clothes  on,  some 
of  them ;  and  wonderful  to  see  the  hauls  we  made 
of  pickerel  and  perch,  great  big  ones  that  you 
couldn't  have  fooled  into  biting  at  a  hook,  and 
horny  cats,  with  an  occasional  eel,  and  now  and 
then  a  good-sized  black  bass?  And  do  you  mind 
how  along  toward  sundown  we  put  all  the  catch 
into  piles  on  the  grass  as  nearly  even  as  possible 
— a  pile  for  you  and  me  too,  each  of  us, — and 
how  Than  Cummins  turned  his  back  so  he 
couldn't  see  the  piles,  and  Fowl  Bird  pointed 
toward  the  piles,  one  after  another  while  we  all 
looked  on,  and  how  Fowl  asked  for  each  pile, 
"Whose  is  it?"  and  how  Than  said,  "It's  Bill's," 
or  "Big  Lewie's,"  or  "Little  Lewie's,"  or 
"Chris's,"  or  "Uncle  David's,"  and  so  on? 

There  were  three  more  piles,  you  remember, 


TRADING.  179 

than  there  were  folks  in  our  party,  men  and  boys 
all  told.  One  of  those  piles  fell  to  my  grand- 
father, and  I  took  it  home  with  my  own.  An- 
other fell  to  your  father,  and  you  took  that  home 
with  your  pile.  The  third  fell  to  "the  man  what 
owned  the  pond,"  as  we  called  him  when  we 
talked  about  it  on  our  way  home.  How  well  I 
remember  what  you  said.  You  weren't  a  bad  po- 
litical economist  in  those  days,  Doctor.  You 
said:  "Now  it's  all  right  to  give  your  grand- 
father a  pile  of  fish,  because  he  lent  us  the  team. 
And  if  s  all  right  to  give  my  father  a  pile,  because 
he  lent  us  the  net.  But  why  did  they  give  a  pile 
to  the  man  what  owns  the  pond?" 

I  wanted  to  know  if  he  hadn't  as  good  a  right 
to  one  as  my  grandfather  and  your  father.  We 
didn't  either  of  us  question  the  square  deal,  you 
see,  of  dividing  the  fish  among  the  men  who  had 
helped  catch  them.  Maybe  that  was  because  we 
were  only  kids.  But  we  both  questioned  the 
square  deal  of  giving  any  to  the  folks  that  hadn't 
helped  catch  them.  Maybe  that,  too,  was  because 
we  were  kids.  Do  you  remember  how  you  an- 
swered me? 

You  said  that  we  couldn't  have  got  over  to  the 
pond  without  my  grandfather's  team,  and  that 
we  couldn't  have  caught  so  many  fish  without 
your  father's  net,  and  so  your  father  and  my 
grandfather  helped  catch  the  fish,  even  if  they 
weren't  at  the  pond  in  person. 

But  I  was  good  and  ready  for  you.  I  wanted 
to  know  how  many  fish  we  could  have  caught  if 
"the  man  what  owned  the  pond"  hadn't  let  us 
fish  in  it. 

That  stumped  you,  but  pretty  soon  you  gath- 
ered yourself  together  and  blurted  out :  "But  the 
man  what  owns  the  pond,  he  didn't  make  it,  and  he 
didn't  put  the  fish  into  it,  and  he  didn't  do  nothin' 
but  just  head  us  off  from  fishing  there— or  could 


180  SOCIAL    SERVICE. 

have — unless  we'd  give  him  some  of  the  fish  we 
caught." 

And  as  we  talked  it  over,  you  and  I,  there  at 
the  back  end  of  the  old  truck  wagon,  chewing 
wisps  of  straw  thoughtfully  as  we  rode  home  in 
the  moonlight,  and  speaking  in  low  tones  for  fear 
the  men  would  hear  us  and  make  fun  of  us  for 
trying  to  think  of  something  serious  and  sensi- 
ble, we  came  to  a  very  wise  conclusion.  We  con- 
cluded that  those  fish  belonged  to  the  folks  that 
caught  them;  and  that  grandfather  caught  some 
because  he  had  helped  by  lending  us  the  horses 
he  had  raised  and  the  wagon  he  had  bought  by 
working  as  a  farmer  and  trading  "over  to  town" 
for  what  wagon-makers  had  made ;  and  that  your 
father  had  caught  some  because  he  had  lent  us 
the  net  which  he  had  bought  of  its  makers  by 
working  as  a  blacksmith  and  trading  for  it;  and 
that  "the  man  what  owned  the  pond"  hadn't 
caught  any,  because  God  made  the  pond  and 
stocked  it  with  fish  and  hadn't  labeled  either 
the  pond  or  the  fish  with  anybody's  name  or 
traded  them  to  anybody — but  we  must  give  "the 
man  what  owned  the  pond"  some  of  our  fish  to 
make  him  good-natured  enough  to  let  us  fish  in 
the  pond. 

We  didn't  state  that  sage  conclusion  quite  so 
explicitly,  but  the  idea  was  in  pretty  good  shape 
in  our  minds  and  we  understood  each  other  about 
it  pretty  much  as  I  am  recalling  it  to  you  now. 
We  might  have  worked  it  into  better  shape  even 
in  those  days  when  going  a-fishing  was  our  sub- 
stitute for  a  trip  to  Europe;  only  it  seemed  to  us 
the  next  day  that  may  be  we  must  be  wrong, 
for  that  wasn't  the  way  the  grown  folks  looked 
at  the  thing  at  all.  So  we  threw  it  off  our 
minds  and  turned  our  attention  to  learning  to 
smoke  without  getting  sick. 

Now,  Doctor,  that  fishing  experience  enables 


TRADING.  181 

me  to  make  a  pretty  good  illustration  of  "prof- 
its." Those  piles  of  fish  were  the  "profits"  for 
the  day  of  everybody  who  got  a  pile.  The  pile 
that  "the  man  what  owned  the  pond"  got  for  let- 
ting us  fish  in  it  were  his  "profits."  The  pile  my 
grandfather  got  for  lending  us  the  team  were  his 
"profits."  The  pile  your  father  got  for  lending 
us  the  net  were  his  "profits."  And  the  pile 
apiece  that  you  and  I  and  the  men  got,  they  were 
our  "profits."  But  the  elements  were  different 
in  each  of  those  "profits."  To  use  the  terms 
of  political  economy  that  you  and  I  afterwards 
learned  under  Prof.  Rutley,  my  grandfather's 
"profits"  and  your  father's  were  "replacement" 
and  "interest"  on  "capital;"  the  "profits"  of  "the 
man  what  owned  the  pond"  were  "rent"  of  "land," 
and  the  other  "profits"  were  "wages"  for  "la- 
bor." 

There  were  no  "profits"  I  suppose  in  the  ordi- 
nary business  sense  in  that  illustration  because 
the  transactions  were  not  on  a  profit  basis.  But 
suppose  that  instead  of  our  making  the  divisions 
of  fish  as  we  did,  my  grandfather  had  "capital- 
ized" the  fishing  expedition.  Suppose  he  had  said 
to  all  of  us — or  to  those  men,  let  us  say,  so  as  to 
keep  ourselves  out  of  the  problem, — suppose  he 
had  said  to  them,  "You  go  down  to  Green's  Pond 
tomorrow  and  fish  for  me,  and  I'll  give  you  each 
a  bushel  of  wheat."  Suppose  he  had  said  to  your 
father,  "Lend  me  your  net  tomorrow,  and  I'll  re- 
turn it  with  a  bushel  of  wheat."  Suppose  he  had 
said  to  "the  man  what  owned  the  pond,"  "Let 
my  folks  fish  in  your  pond  tomorrow,  and  I'll 
give  you  a  bushel  of  wheat."  Don't  you  see  that 
the  whole  thing  would  have  been  just  the  same 
as  it  was,  except  that  grandfather  would  have  been 
taking  the  risk  of  the  catch,  and  everybody  else 
would  have  had  a  sure  thing?  If  the  catch  had 
turned  out  large,  grandfather  would  have  made 


182  SOCIAL     SERVICE. 

a  good  profit  that  day,  which  might  not  have 
been  as  good  another  day;  and  if  the  catch  had 
turned  out  poor,  he  would  have  made  a  small 
profit,  or  maybe  none  at  all,  which  he  might  have 
offset  with  a  luckier  fishing  expedition  later  on. 
But  everybody  else  would  have  got  just  so  much 
wheat  whether  the  catch  of  fish  had  turned  out 
good  or  poor. 

Now  if  my  grandfather  had  been  free  to  make 
that  offer  or  not  to  make  it  as  he  pleased,  and 
everybody  to  whom  he  made  it  had  been  wholly 
free  to  accept  it  or  not,  what  wrong,  or  harm, 
or  unfairness  would  there  have  been  in  it?  I 
can't  see  any. 

Of  course  I  could,  if  those  men  had  been  de- 
prived in  some  way  of  their  equal  rights,  and 
instead  of  making  their  decision  upon  the  basis 
of  the  more  or  less  desirable,  had  consequently 
been  obliged  to  make  it  under  coercion.  If  they 
had  been  slaves,  for  instance,  so  that  they  had  to 
catch  fish  for  grandfather  on  his  own  terms;  or 
if  all  the  fishing  ponds  had  belonged  to  men 
"what  owned  the  pond;"  or  the  ponds  had  been 
"capitalized"  and  the  price  raised  so  high  by  jug- 
handled  competition  for  ponds  that  the  men 
couldn't  fish  at  all  without  bargaining  their  la- 
bor away  to  my  grandfather  because  he  had  the 
"capital,"  which  they  had  not,  to  enable  him  to 
bargain  with  the  pond  owner;  or  if  for  any  sim- 
ilar reason  they  had  been  compelled  to  accept  my 
grandfather's  terms  or  go  without  food  or  worse, — 
why,  to  be  sure,  in  any  such  case,  there  would 
have  been  harm  and  unfairness  in  the  thing  in 
plenty.  But  such  a  condition  would  be  patho- 
logical. 

Normally,  it  makes  no  difference  to  any  one 
but  their  individual  selves,  on  what  terms  men 
co-operate  in  social  service.  Whether  they  di- 
vide results  among  themselves  after  the  results 


TRADING.  183 

are  known,  in  which  case  there  would  be  neither 
"profits"  nor  "wages"  in  the  technical  business 
sense  of  those  terms,  but  only  shares  divided  com- 
munally as  we  divided  the  fish  at  Green's  Pond; 
or  whether  some  sell  and  others  buy  in  advance  of 
results  by  paying  what  business  men  call 
"wages,"  and  making  or  losing  what  business  men 
call  "profits,"  concerns  only  the  bargainers.  Be 
it  either  way,  and  yet  every  co-operator  in  social 
service  would  get  in  the  general  round-up  ap- 
proximately neither  more  nor  less  than  he  earned 
— provided,  of  course,  that  competition  were  not 
seriously  obstructed  by  monopoly  any  where  in 
the  interlinked  circles  of  trade. 

In  my  opinion  the  "profit"  and  "wages"  sys- 
tem in  those  free  conditions  would  be  better  for 
all  and  fairer  for  each  than  any  attempt  at  ar- 
bitrary organization  of  a  system  could  possibly  be. 
But  I  confess,  Doctor,  that  I  can't  see  any  far- 
ther into  next  week  than  the  next  man.  So  my 
opinion  on  that  point  may  not  be  sound.  Of 
this,  however,  I  am  sure,  that  competition  must 
be  freed  from  monopoly  throughout  the  whole  ex- 
tent of  the  circles  of  trade,  in  order  that  the  best 
and  fairest  system  of  co-operative  industry — what- 
ever that  system  may  prove  to  be,  whether  of 
normal  growth  or  arbitrary  construction — shall 
have  opportunity  for  development. 


CHAPTER  IX. 

The  Circles  of  Trade. 

In  these  confabs  of  ours  on  the  mechanism  of 
social  service,  I  have  said  a  good  deal,  Doctor, 
about  retail  stores.  But  you  must  have  realized 
the  necessity  for  it  by  this  time.  Isn't  it  pretty 
clear  to  you  now  that  there  are  two  points  of  indi- 
vidual contact  with  the  mechanism  of  social  service 
— the  place  at  which  the  individual  servitor  works, 
and  the  place  where  he  gets  his  pay — not  his  money, 
of  course,  but  the  things  he  has  really  worked  for 
and  which  he  may  buy  with  his  money  ?  The  place 
where  he  gets  his  pay,  his  real  pay,  is  the  retail 
store  as  a  rule.  But  you  must  consider,  my  dear 
Doctor,  what  I  mean  by  retail  stores.  I  mean  not 
only  the  places  that  we  call  by  that  name,  but  also 
all  other  points  of  delivery  for  final  consumption, 
for  final  use. 

In  retail  stores  the  service  to  customers  is  usu- 
ally paid  for  in  the  form  of  profits,  a  subject  that 
we  have  already  been  over.  But  whether  paid  in 
profits  or  in  some  other  way,  makes  no  difference 
to  the  matter  that  I  want  to  awaken  your  reflection 
upon  now.  The  point  here  is  that  retail  storekeep- 
ers, persons  who  really  participate  in  the  manage- 
ment of  retail  stores  in  any  way  or  to  any  extent, 
are  in  that  way  and  to  that  extent  social  servitors. 

It  has  come  handy  to  me  several  times  to  liken 
retail  stores — those  places  for  the  accumulation  of 
commodities  for,  and  their  delivery  to,  consumers 
— to  the  faucets  in  our  houses.  As  these  release 
water  from  service  pipes  into  which  it  flows  from 
reservoirs  in  a  continuous  stream — release  it  just 


THE  CIRCLES  OF  TRADE.  185 

when  and  where  we  need  it, — so  do  the  retail  stores 
release  commodities.  Please  keep  the  crude  simile 
in  mind,  and  I  will  try  to  outline  the  mechanism 
of  social  service,  back  from  the  retail  stores — the 
faucets  of  the  social  service  supply — through  the 
service  pipes  such  as  delivery  wagons,  and  the  big 
mains  such  as  railroad  trains  and  ships,  and  buck 
through  the  reservoirs  that  we  call  wholesale  stores, 
and  the  filters  that  we  call  factories,  to  the  utter- 
most sources  of  supply. 

We  can  assign  about  all  the  things  that  men 
either  produce  or  consume  to  four  classes:  Food, 
Clothing,  Shelter  and  Luxuries.  Doesn't  that  strike 
you  as  a  rational  generalization?  Yes,  we  might 
add  a  fifth  class,  so  as  to  include  your  profession 
and  mine,  and  also  clergymen,  actors,  teachers,  bar- 
bers, and  others  who  serve  directly  instead  of  mak- 
ing or  handling  commodities  for  us  to  buy  at  stores. 
Suppose  we  distinguish  this  class  as  Personal  Ser- 
vants. 

Just  imagine,  now,  that  the  Personal  Servants 
tap  the  commercial  reservoir  for  Food — all  of  them 
and  for  all  the  food  that  is  supplied.  We'll  talk  in 
this  wholesale  way  at  first,  for  simplicity.  The 
actual  details  are  very  complex  and  we  must  first 
make  a  short  cut  to  the  principle.  By  supposing 
that  all  the  Personal  Servants  demand  all  the  Food 
supply,  we  are  not  departing  from  the  principle; 
we  are  merely  simplifying  by  arbitrary  illustration. 
Very  well,  then,  imagine  that  the  Personal  Ser- 
vants tap  the  commercial  reservoir  for  Food.  You 
know  how  they  would  do  it.  It  is  the  only  way. 
They  would  buy  food  at  retail  food  stores — would 
turn  on  the  food  faucets.  How  they  pay  for  it 
makes  no  difference  yet.  We'll  come  to  that  by  and 
by.  For  the  present  we  may  suppose  that  they  give 
money,  or  checks,  or  notes,  or  have  the  items 
"charged."  Upon  their  demand  food  would  flow 
out  to  them  from  the  retail  food  stores  as  water 


186  SOCIAL     SERVICE. 

flows  from  a  water  faucet.  If  you  want  a  concrete 
instance,  something  actual  instead  of  imaginary, 
think  of  the  restaurant  of  our  friend  Joseph  where 
we  began  our  talks  on  this  subject  last  Summer. 
While  grocery  stores  yield  some  kinds  of  food  in 
certain  stages  of  finishment,  and  butcher  stores 
other  kinds,  the  restaurant  or  the  hotel  or  the 
boarding  house  are  stores  for  the  delivery  of  fin- 
ished food,  of  food  on  the  table  and  ready  to  eat. 
So  let  us  suppose  that  it  is  to  restaurants  and  hotels 
and  boarding  houses  that  our  Personal  Servants  go 
for  the  Food  they  demand — to  the  places,  that  is, 
where  they  can  tap  the  social  service  reservoirs  for 
finished  food. 

Now,  Doctor,  what  would  be  the  effect  of  this 
flowing  out  of  Food  from  the  retail  food  stores? 
Never  mind  whether  it  all  goes  out  or  only  a  part. 
What  would  be  the  effect  in  either  case?  Why, 
that's  no  riddle.  In  greater  or  less  degree  accord- 
ing to  the  demand,  the  supply  in  the  retail  stores 
would  be  lessened,  wouldn't  it  ?  Of  course.  And 
what  do  you  think  the  retail  storekeepers  would  do 
then  ?  Wouldn't  they  send  to  the  wholesale  stores 
to  renew  their  supply  ?  Isn't  that  what  they  do  in 
fact?  And  what  are  the  wholesale  stores  for  but 
to  respond  promptly  to  this  demand?  But  when 
they  do  respond,  their  stock  also  runs  low,  doesn't 
it?  And  where  do  they  turn  to  renew  their  sup- 
ply ?  Must  be  to  the  factories,  mustn't  it  ?  And 
then  what  do  the  manufacturers  do  as  they  find 
their  stock  running  out  to  the  wholesale  stores? 
How  do  they  restore  it  ?  Don't  they  manufacture 
more  commodities  of  the  kind  that  have  gone  out  ? 
To  be  sure.  But  how?  Why,  they  have  to  call 
upon  material  men,  and  machinists,  and  factory 
workmen;  and  these  in  turn  call  upon  other  ma- 
terial men,  and  other  machinists,  and  other  factory 
workmen,  and  miners.  So,  all  along  the  social 
service  line  there  is  in  consequence  of  the  demand 


THE  CIRCLES   OF  TRADE.  187 

of  the  Personal  Servants  for  Food,  a  depletion  of 
all  the  accumulated  stores  of  food  and  food-mak- 
ing materials,  and  of  machinery ;  and  a  demand  for 
every  kind  of  service  that  enters  into  the  transport- 
ing of  food  and  food  materials  and  machinery,  and 
for  every  kind  of  service  that  the  renewal  of  the 
supply  of  food  and  the  manufacturing  and  trans- 
porting of  food-making  machinery  requires. 

Don't  you  see  the  almost  perfect  analogy  to  the 
water  reservoir?  The  Personal  Servants,  when 
they  turn  on  the  Food  tap  at  the  retail  stores,  take 
food  already  there.  This  is  finished  food.  That 
is,  it  is  food  finished  ready  to  eat,  as  at  the  restau- 
rant, for  instance ;  or  else  finished  ready  for  home 
preparation,  as  at  the  family  grocery.  But  when 
that  food  flows  out  from  the  retail  food  stores,  it 
makes  way  for  the  food  in  the  larger  reservoir,  the 
wholesale  stores,  which  is  pressing  toward  the  re- 
tail stores,  as  water  in  the  reservoir  presses  toward 
the  outlet  at  the  faucets  to  flow  into  its  place. 
And  when  the  flow  proceeds  from  the  wholesale 
stores,  it  makes  way  for  food  finished  in  the  fac- 
tories and  pressing  toward  the  wholesale  stores  to 
flow  into  them.  And  as  finished  food  goes  out  of 
the  factories,  the  unfinished  food  in  various  stages 
of  finishment  presses  forward,  just  as  water  in  the 
streams  does,  don't  you  see?  and  this  makes  way 
for  food  materials  to  press  into  the  factories.  And 
so  it  flows  through  transportation  agencies,  rail- 
roads and  wagons  and  boats,  from  farm,  and 
ranch,  and  mine,  and  forest,  and  quarry,  and  sea, 
back  from  the  uttermost  limits  of  food  supply  and 
machinery  for  food  supply,  and  from  the  natural 
source  of  all,  this  blessed  old  planet  of  ours. 

Why,  Doctor,  the  demand  of  Personal  Servants 
for  Food  at  the  retail  food  stores,  is  a  demand  to 
that  extent  for  all  the  social  service  of  the  civilized 
world  which  is  concerned  in  producing  food  and 
the  artificial  instruments  of  food  production.  It 


188  SOCIAL    SERVICE. 

tends  to  make  a  steady  stream  of  Food  from  old 
Mother  Earth,  over  old  Mother  Earth,  into  the 
wholesale  stores  of  the  world  and  thence  to  the 
points  of  retail  delivery.  To  classify  completely 
the  service  affected  would  necessitate  the  cata- 
loguing of  all  industries  that  either  directly  or  in- 
directly contribute  to  maintaining  the  flow  of 
food,  and  the  naming  of  every  grade  of  workman 
from  newest  apprentice  to  supervising  employer, 
and  from  bank  clerk  to  farm  hand.  What  Per- 
sonal Servants  really  do,  therefore,  when  they  buy 
Food  at  food  stores,  is  to  direct  the  expenditure  of 
labor  to  the  production  of  the  kind  of  food  they 
demand.  Don't  you  recognize  our  index  finger 
law?  The  direction  of  the  demand  for  service, 
you  know,  determines  the  character  of  the  supply 
of  service. 

Yes,  Doctor,  this  is  a  very  crude  illustration.  I 
warned  you  of  that  when  I  began  to  make  it.  It 
is  crude  because  it  aims  by  simple  and  arbitrary 
particularization  to  illustrate  processes  that  are 
bewilderingly  complex.  It  is  an  effort  to  simplify 
our  conception  of  the  circles  of  trade,  which  are 
so  interlinked,  each  with  millions  upon  millions  of 
others,  that  illustration  is  impossible  except  in 
some  such  crude  way  as  I  have  adopted.  But  let 
us  go  on  with  the  illustration  a  little  farther; 
maybe  its  significance  will  clarify  as  we  proceed. 

Clothing  is  needed,  you  mind,  as  well  as  Food. 
Let  us  suppose,  then,  for  simplicity,  that  the  Food- 
makers  alone  demand  Clothing,  just  as  for  the 
same  purpose  we  have  supposed  that  Personal  Ser- 
vants alone  demand  Food.  Then  the  claims  for 
compensation  which  the  Personal  Servants  had 
passed  over  to  the  Foodmakers — the  money,  or  the 
checks,  or  the  book  accounts,  or  what  not,  don't 
you  remember  ? — would  be  passed  on  by  all  classes 
of  Foodmakers  and  f  oodmaking  machinery  makers, 
and  food  transporters,  to  the  retail  clothing  stores, 


THE  CIRCLES  OF  TRADE.  189 

and  Clothing  would  consequently  flow  out  from 
those  social  service  reservoirs  to  Foodmakers,  just 
as  Food  had  flowed  out  to  Personal  Servants.  And 
don't  you  see,  let  me  ask  you  right  here,  that  in 
the  general  round-up  the  Foodmakers  would  have 
swapped  Food  for  Clothing?  Foodmakers  of  all 
classes,  from  ploughman  to  journeyman  baker, 
would  have  had  their  wages.  Oh,  yes,  certainly, 
provided  there  was  no  "rake-off;"  I  am  assum- 
ing that.  Now,  in  consequence  of  the  lowering  of 
the  accumulated  supply  of  Clothing,  a  process  sim- 
ilar to  that  we  have  already  considered  with  refer- 
ence to  Food  would  set  in  with  reference  to  Cloth- 
ing. The  reduced  supply  in  the  retail  clothing 
stores  would  be  communicated  back  in  further  de- 
mands for  clothing,  and  clothing  material  and 
machinery,  from  retailer  to  wholesaler  and  thence 
to  manufacturer,  and  so  on  to  the  uttermost  limits 
of  the  natural  and  the  social  service  sources  of 
Clothing  supply.  It's  the  simile  of  the  reservoir 
over  again,  don't  you  see  ?  Clothing,  and  clothing 
machinery,  in  all  stages  of  finishment,  clear  back 
to  the  untouched  raw  material  in  the  earth,  would 
move  forward  when  the  finished  Clothing  was  tak- 
en out  at  the  retail  stores,  just  as  water  moves 
forward  when  taken  from  the  faucet,  just  as  the 
food  supply  in  all  stages  of  finishment  moved  for- 
ward when  taken  from  the  retail  food  stores.  Our 
index-finger  law  again,  don't  you  see,  Doctor  ?  The 
direction  of  the  demand  for  service  determines  the 
character  of  the  supply. 

And  now  what  shall  the  Clothingmakers — con- 
sisting of  all  the  social  servitors  of  the  civilized 
world  who  contribute  to  the  making  or  the  trans- 
portation or  the  storing  of  clothing  and  clothing 
materials  and  machinery — what  shall  they  do  for 
their  pay?  They  have  had  the  money,  or  the 
checks,  or  what  not,  which  the  Personal  Servants 
gave  to  the  Foodmakers,  but  these  things  are  not 


190  SOCIAL    SERVICE. 

the  pay  they  want.  They  want  social  service,  in 
the  form,  let  us  say,  of  Shelter.  How  will  they 
get  it?  Why,  they  will  tap  the  faucets  at  the  re- 
tail shelter  stores. 

Never  heard  of  a  shelter  store?  Well,  that 
shows  that  you  didn't  pay  strict  attention  when  I 
explained  that  retail  stores  are  the  points  of  deliv- 
ery of  goods  for  consumption,  whether  usually 
called  stores  or  not.  Any  man  who  keeps  flats, 
or  tenement  houses  or  dwellings  of  any  kind,  for 
sale  or  to  rent,  keeps  a  retail  shelter  store.  No, 
not  those  who  rent  business  buildings  or  offices. 
Such  shelter  is  like  machinery.  It  is  used  to  pro- 
duce things  for  rendering  social  service  with,  and 
not  for  consumption  in  the  enjoyment  of  social 
service.  What  are  wholesale  shelter  stores  ?  They 
are  the  stores  to  which  Sheltermakers  go  for  build- 
ing materials  and  tools  and  machinery. 

Well,  now  let  us  suppose  that  the  Clothingmak- 
ers  take  their  pay  in  Shelter.  Then  doesn't  the 
same  thing  happen  to  the  shelter  supply  that  hap- 
pened to  the  clothing  and  the  food  supply?  It 
runs  low,  don't  you  see  ?  and  that  creates  a  demand 
for  further  supply,  which  pulsates  back  from  the 
dealer  in  dwellings  all  through  the  building  indus- 
tries to  the  uttermost  limits  of  the  natural  and  the 
social  service  sources  of  Shelter  supply. 

If  now  the  Sheltermakers  take  their  pay  in  Lux- 
uries, and  the  Luzurymakers  take  theirs  in  Per- 
sonal Services,  this  imaginary  circle  of  trade, 
which  I  have  used  for  simplicity,  is  complete. 
The  social  servitors  that  we  have  distinguished 
as  Personal  Servants  will  have  paid  for  the  Food 
they  took  out  of  the  social  service  reservoir,  by 
serving  the  Luxurymakers.  The  latter  will  have 
squared  their  accounts  by  serving  the  Sheltermak- 
ers with  Luxuries,  who  will  have  squared  theirs  by 
serving  the  Clothingmakers  with  Shelter;  these 
in  turn  will  have  "made  good"  by  serving  the 


THE  CIRCLES   OF  TRADE.  191 

Foodmakers  with  Clothing,  and  the  Foodmakers 
will  have  done  it  by  serving  the  Personal  Servants 
with  Food.  If  the  transactions  were  effected  by 
means  of  money,  the  money  will  be  back  in  the 
hands  of  the  Personal  Servants  who  originally 
gave  it  out  for  Food ;  if  by  checks,  the  checks  will 
all  have  been  cancelled;  if  by  open  accounts,  the 
debit  side  of  each  account  will  be  balanced  on  the 
credit  side.  Each  class  will  have  put  into  the  so- 
cial service  reservoir  an  equivalent  in  service  in 
the  line  of  one  general  specialty,  for  what  it  will 
have  taken  out  in  the  line  of  another  general  spe- 
cialty. And  so  we  have  an  imaginary  circle  of 
trade. 

Now,  Doctor,  if  you  will  substitute  individual 
specialists  in  social  service  for  our  five  classes,  you 
may  easily  imagine  what  each  individual  causes 
in  the  circles  of  trade  when  he  buys  commodities 
at  a  retail  store,  or  pays  for  a  personal  service, 
such  for  instance  as  the  barber  or  the  bootblack 
may  perform.  He  lowers  the  supply  of 
commodities  in  the  store,  or  enables  the  barber 
or  the  bootblack  to  do  so;  and  the  news  of  this 
lowering  of  supply  is  communicated  back  through 
all  the  channels  and  circles  of  trade  to  the  utter- 
most sources  of  the  supply  of  those  commodities, 
and  of  all  the  machinery  used  to  make,  transport, 
store  and  deliver  them.  The  only  difference  be- 
tween my  imaginary  circle  of  trade,  which  you 
have  circumnavigated  with  me  so  laboriously  and 
patiently,  and  the  real  circles  of  trade,  is  that  that 
was  one  simple  circle,  whereas  they  are  manifold 
and  multiplex.  But  my  arbitrary  illustration 
holds  close  to  the  main  principle,  which,  as  I  have 
often  reminded  you,  and  now  remind  you  finally 
and  for  all,  is  much  the  same  as  in  the  distribu- 
tion of  water  in  cities — the  retail  store  standing 
for  the  water  faucet.  That  is  to  say,  the  retail 
store  is  the  place  in  the  mechanism  of  social  serv- 


192  SOCIAL     SERVICE. 

ice  where  each  servitor  gets  his  real  wages,  the 
kind  of  social  service  that  he  has  worked  for.  He 
pours  into  the  social  service  reservoir,  whether  as 
supervising  employer  or  hired  workman,  the  serv- 
ice he  can  render  best ;  and  he  takes  out  at  the  re- 
tail store  the  services  that  he  wants  most,  to  the 
value  of  the  service  he  has  put  in. 

Here  we  have,  don't  you  see,  an  exemplification 
of  our  middle-finger  law — the  law  that  every  one 
who  consumes  products  of  social  service,  and  who 
pays  his  way  in  the  world  with  service  of  his  own, 
virtually  produces  the  things  he  consumes?  If  I 
buy  a  cigar  with  ten  cents  that  I  have  got  for  my 
work,  don't  I  virtually  make  that  cigar  ?  No,  not 
that  identical  one,  for  it  was  made  and  ready  for 
me  before  I  earned  my  ten  cents.  But  when  I  take 
that  cigar  the  dealer  has  to  get  another  in  its  place 
to  keep  up  his  stock,  and  so  cigar  making  is  influ- 
enced all  the  way  back  by  the  exchange  of  my 
work  for  that  cigar.  When  you  think  of  these  cir- 
cles of  trade  as  in  continuous  motion,  you  must 
see  that  the  workers  keep  them  going  by  the  con- 
stant action  and  reaction  of  production  and  con- 
sumption. The  circles  of  trade  are  constantly  re- 
volving circles  of  service,  interlinked  with  infinite 
complexity.  Trade  consists  at  the  bottom  in  ex- 
changes of  service,  of  work,  of  labor,  of  human 
effort. 

No,  not  always  exchanges  of  labor,  for  there  are 
parasites.  But  it  is  at  the  retail  stores,  also,  that 
the  parasite,  the  man  who  has  a  "rake-off"  of  some 
kind,  whether  through  lawless  theft  or  lawful  priv- 
ilege, gets  his — I  had  nearly  said  "wages,"  Doctor, 
but  it  is  wages  only  in  the  sense  that  sin  has 
"wages,"  and  as  I  am  talking  about  interchanges 
of  social  service,  I  guess  I'll  call  it  "plunder."  No 
offense,  you  know,  even  if  it  does  hark  back  to 
those  royalties  of  yours  for  allowing  men  to  work 
in  one  of  God's  coal  deposits. 


THE  CIRCLES   OF  TRADE.  193 

But  I  mustn't  get  off  into  pathology,  not  for  the 
present.  Here  we  are  once  more  up  against  the 
phenomenon  of  value,  don't  you  see  ?  for  trading  of 
social  services  is  done  in  the  language  of  quanti- 
ties, qualities  and  values.  We  have  already  talked 
about  what  value  is,  but  we  meet  it  now  in  the 
practical  processes  of  the  mechanism  of  social  serv- 
ice. Don't  you  see  how  it  serves  to  regulate  produc- 
tion ?  It  advises  the  social  servitors  in  each  depart- 
ment of  social  service,  through  their  price  lists,  of 
the  demand  and  supply  of  products  in  their  several 
departments  of  service.  Kising  value  indicates  a 
falling  supply,  or  a  rising  demand.  Falling  value 
indicates  the  reverse.  If  without  a  rise  in  the  la- 
bor cost  of  their  production,  the  value  of  a  class 
of  labor  products  rises,  the  dealer  knows  that  his 
output  is  below  effective  demand;  if  it  falls,  he 
knows  that  his  output  is  in  excess  of  effective  de- 
mand ;  if  it  remains  steady,  he  knows  that  supply 
and  effective  demand  are  at  an  equilibrium. 

This  is  a  result  of  competition.  When  competi- 
tion is  free  of  monopoly  obstructions,  it  works  as 
faithfully,  through  variations  in  value,  in  indicat- 
ing alterations  of  demand  and  supply,  as  the 
thermometer  out  on  your  porch  reports  changes  in 
heat  and  cold.  Yes,  "corners"  may  make  a  dis- 
turbance, but  "corners"  are  pathological.  You 
can't  do  much  with  a  "corner"  unless  a  legalized 
monopoly  helps  you  out.  This  is  a  discovery  that 
more  than  one  man  has  made  to  his  sorrow  by 
matching  a  corner  against  competition  in  a  market 
where  freedom  of  trade  wasn't  shackled  too  tight. 

John  Stuart  Mill  says  that  values  are  raised  or 
lowered  by  "the  higgling  of  the  market."  But 
this  "higgling"  is  not  at  the  retail  stores,  not  very 
much,  at  any  rate,  except  as  we  may  speak  of  the 
advance  and  recession  of  demand  as  "higgling." 
Too  many  collateral  influences  may  affect  retail 
prices  to  make  them  a  barometer.  The  amount 


194  SOCIAL     SERVICE. 

of  any  purchase  is  usually  so  small  that  "higgling" 
over  the  price  could  hardly  save  enough  to  be 
worth  the  effort.  Or  it  may  be  that  pride  dictates 
patronizing  an  expensive  retail  store  because  it  is 
fashionable.  Then,  again,  we  sometimes  patronize 
expensive  retail  stores  because  their  reputation  is 
a  guarantee  of  the  quality  of  goods  of  which  we 
have  little  or  no  expert  knowledge.  At  the  whole- 
sale store,  however,  "higgling"  is  reduced  to  an 
art — the  art  of  getting  the  most  for  the  least,  on 
the  one  hand,  and  of  charging  "all  the  traffic  will 
bear,"  on  the  other.  Here  the  wholesaler's  art  in 
selling  is  pitted  against  the  retailer's  art  in  buying. 
The  same  thing  occurs  when  wholesaler  buys  of 
manufacturer,  except  that  here  the  wholesaler 
practices  the  buyer's  art.  Reflect  a  moment  and 
you'll  see.  Though  you  or  I  might  now  and  then 
pay  fifteen  cents  for  a  cigar  at  the  retail  stores,  a 
cigar  that  we  ought  to  get  for  ten,  no  cigar  dealer 
will  pay  $1,500  for  a  quantity  of  cigars  that  he 
ought  to  get  for  $1,000.  If  he  did,  he  would  soon 
be  out  of  business.  So  "the  higgling  of  the  market" 
is  in  the  wholesale  transactions.  Yet  retail  transac- 
tions do  affect  values.  If  retail  prices  are  high, 
the  general  force  of  retail  buying  weakens,  and 
this  force  perpetuates  itself  throughout  the  circles 
of  trade  to  the  uttermost  sources  of  supply ;  if  they 
are  low,  it  strengthens  retail  buying,  with  the  ef- 
fect of  stimulating  activity  throughout  the  circles 
of  trade. 

Well,  if  I  haven't  said  anything  about  stock  ex- 
changes, boards  of  trade,  and  so  on,  it  is  because 
they  are  mere  details  in  the  general  scheme,  mere 
cogs  in  the  mechanism  of  social  service.  They  are 
market  places,  the  modern  substitute  for  what  the 
old  lawyers  called  "markets  overt."  Our  fore- 
bears would  take  their  products  to  market  on  mar- 
ket day  and  swap  them.  We  take  cattle  to  the 
stock  yards,  where  brokers  dispose  of  them  for  us 


THE  CIRCLES   OP  TRADE.  195 

in  open  market;  or  oil  to  a  pipe  line,  where  it  is 
emptied  into  a  reservoir,  and  we  are  given  an  oil 
certificate,  which  transfers  title  to  oil  by  passing 
from  hand  to  hand;  or  we  put  our  grain  into  an 
elevator  and  get  a  grain  certificate  which  is  dealt 
in  at  the  board  of  trade ;  or  we  buy  railroad  stock, 
thereby  securing  an  undivided  interest  in  the  ma- 
chinery and  the  land  belonging  to  a  railroad,  and 
this  certificate  is  dealt  in  on  the  stock  exchange. 
Of  course  these  'Change  transactions  furnish  op- 
portunity for  gambling.  Most  men  can  hardly 
see  two  flies  crawl  up  a  window  pane  without  want- 
ing tq  bet  which'll  get  off  the  pane  first. 
But  after  all,  this  gambling  on  'Change,  so  they 
tell  me,  has  a  sort  of  balance  wheel  effect  on  legiti- 
mate trading.  At  all  events  the  great  volume  of 
transactions  on  'Change,  take  the  year  through, 
does  facilitate  the  legitimate  activities  of  the  cir- 
cles of  trade.  But  this  is  part  of  the  technicality 
of  a  business  not  our  own,  Doctor,  and  perhaps  we 
may  not  very  clearly  understand  it.  Nor  do  we 
need  to,  for  'Change  transactions  can  do  riobody 
any  harm  at  the  worst,  except  those  who  engage  in 
them,  so  long  as  monopoly  is  not  allowed  to  enter 
in.  If  the  use  of  exchanges  and  boards  of  trade  is 
monopolized,  then  they  may  be  harmful  to  the 
general  community,  just  as  any  other  part  of  the 
mechanism  of  social  service  becomes  harmful  if 
monopoly  chokes  the  circles  of  trade.  But  not  oth- 
erwise. The  thing  we  need  to  keep  our  eye  on  is 
not  the  particular  technicalities  of  any  special 
business,  but  its  freedom.  So  long  as  the  busi- 
ness is  free,  we  need  have  no  fear.  Competition 
will  make  its  votaries  behave  themselves.  But  if 
monopoly  comes  in  anywhere,  competition  is  to 
that  extent  weakened,  and  the  rest  of  us  are  put  at 
the  mercy  of  the  fellows  who  are  "in  on  the 
ground  floor." 

The  one  great  principle  to  be  kept  constantly 


196  SOCIAL     SERVICE. 

in  mind  is  this,  that  the  circles  of  trade,  the  move- 
ments of  business,  under  free  competition,  are  de- 
termined, and  the  mechanism  is  operated,  by  the 
ebb  and  flow  of  general  demand  for  particular 
services.  Business  is  co-operation  in  general  ac- 
tivity— world-wide  division  of  labor  in  working 
harness. 


CHAPTER  X. 
Credits  and  Accounting. 

When  I  gave  you  my  crude  illustration  of  the 
circles  of  trade,  I  injected  the  remark,  if  you  re- 
member, Doctor,  that  it  made  no  difference  how 
the  buyers  at  retail  stores  paid  for  what  they  got, 
because  the  whole  affair  was  in  the  end  simply  a 
matter  of  service  for  service.  And  it  really  didn't 
make  any  difference  in  that  connection.  But  as 
part  of  the  mechanism  of  social  service,  the  mech- 
anism of  payments  is  highly  important.  Maybe  I 
had  better  call  it  the  mechanism  of  intermediate 
payments.  For  ultimate  payments  are,  of  course, 
the  services  desired  and  which  are  received  in  ex- 
change finally  for  services  rendered.  In  connec- 
tion, then,  with  the  mechanism  of  intermediate 
payments,  we  ought  to  realize  how  buyers  at  re- 
tail stores  pay  for  what  they  get  there,  and  how 
retail  storekeepers  pay  wholesalers,  and  how 
these  pay  manufacturers,  and  how  manufacturers 
pay  material  producers,  and  how  all  pay  trans- 
porters, and  how  employers  pay  employes,  and  so 
on,  back  and  around  and  in  and  out,  through  all 
the  intricate  windings  of  the  whole  complex  sys- 
tem of  the  multitudinous  circles  of  trade. 

Money  is  a  factor,  of  course.  But  in  the  last 
analysis  the  mechanism  of  intermediate  pay- 
ments is  altogether  one  of  credits  and  account- 
ing. Even  cash  payments  fall  into  that  category, 
as  the  cash  account  of  any  double-entry  ledger 
will  illustrate  pretty  well.  Isn't  cash  always 
debited  with  its  supposed  value,  just  as  any  per- 
son to  whom  you  give  credit  would  be?  and  isn't 


198  SOCIAL.    SERVICE. 

cash  always  credited  with  the  value  of  what  it  pays 
for  you,  just  as  a  person  is  who  pays  you  what  he 
owes?  What  does  all  that  mean,  but  that  cash 
transactions  are  only  forms  of  credits  and  ac- 
counting? 

To  get  an  apprehension  of  the  interlinked  phe- 
nomena of  credits  and  accounting,  suppose  we 
look  a  little  into  the  probable  development  of  the 
mechanism  of  what  I  have  distinguished  as  inter- 
mediate payments  in  the  circles  of  trade. 

The  simplest  trading  of  which  we  can  conceive 
is  just  barter — pure  swap.  That  is  evident.  But 
if  pure  swaps  were  the  only  kind  of  trading  there 
wouldn't  be  much  trading ;  no,  nor  much  civiliza- 
tion, either.  Trading  would  be  too  cumbersome, 
too  clumsy,  too  much  retarded  by  friction.  Any- 
body who  wanted  to  swap — well,  it  makes  no 
difference  what,  only  so  it  is  simple  enough  for 
illustrative  purposes — say,  an  apple  for  a  pear, 
would  have  to  find  some  one  who  not  only  had  a 
pear  that  he  wanted  to  swap,  but  who  wanted  to 
swap  it  for  an  apple.  If  he  could  find  no  such 
person,  but  did  find  one  who  had  a  pear  which 
he  wanted  to  swap  for  a  plum,  intermediate  swaps 
would  be  necessary.  The  owner  of  the  apple 
might  be  obliged  to  swap  it  for  a  peach,  and  the 
peach  for  a  quince,  and  the  quince  for  an  orange, 
and  the  orange  for  a  plum,  in  order  to  procure  the 
only  thing  for  which  the  man  with  the  pear  would 
part  with  it. 

That  would  be  pretty  troublesome,  Doctor; 
don't  you  see  it  would  ?  and  not  very  conducive  to 
specialization  in  social  service.  But  don't  you  also 
see  that  no  matter  how  many  intermediate  swaps 
occurred,  the  essence  of  the  transaction  would  be 
the  same  as  if  there  had  been  a  direct  swap  of  an 
apple  for  a  pear?  The  necessity  for  those  inter- 
mediate swaps  would  have  been  obstructive.  Like 
a  wide  river,  or  a  high  mountain,  or  a  broad  ocean, 


CREDITS    AND   ACCOUNTING.  199 

or  a  protective  tariff,  it  would  have  served  only  to 
make  swapping  difficult.  Pure  barter,  then,  is 
subject  to  a  degree  of  friction  which  would  tend  to 
prevent  the  development  of  specialized  service  by 
jamming  down  an  automatic  brake  upon  the 
circles  of  trade  with  greater  and  greater  pressure 
as  they  tended  to  superior  and  more  general  use- 
fulness. Just  as  labor  tended  to  divide  and  sub- 
divide, and  the  circles  of  trade  consequently  grew 
more  and  more  complex  through  more  and  more 
minute  specialization  of  service,  the  inefficiency 
of  pure  barter  for  placing  products  where  they 
were  most  desired  would  inevitably  operate — don't 
you  see  it  would? — as  an  obstacle  to  the  exten- 
sion of  social  service. 

But  with  the  introduction  of  currency,  this  fric- 
tion would  be  incalculably  diminished.  Don't  you 
see  that  also?  The  man  with  an  apple  who 
prefers  a  pear  would  no  longer  be  under  the  neces- 
sity of  either  hunting  for  a  man  with  a  pear  who 
prefers  an  apple,  or  of  carrying  forward  a  series 
of  intermediate  exchanges  until  he  finds  a  plum 
which  the  other  man  will  take  for  his  pear.  All 
he  would  have  to  find  would  be  some  one  who 
would  give  him  currency  for  his  apple,  and  then 
to  offer  that  for  a  pear ;  whereupon  the  man  who 
sold  his  pear,  which  he  really  didn't  want,  could 
go  out  and  buy  the  plum,  which  he  did  want. 
But  this  transaction  is  the  same  in  its  results,  you 
see,  as  the  simplest  possible  example  of  pure  bar- 
ter. An  apple  is  swapped  for  a  pear,  and  a  pear 
for  a  plum.  By  means  of  currency,  then,  all  the 
benefits  of  pure  barter  are  obtained  in  a  complex- 
ity of  extensive  trading ;  but  with  the  friction  gen- 
erated by  that  complexity  as  completely  avoided 
as  if  there  were  but  one  simple  swap  between  two 
neighbors. 

Sellers  of  a  commodity  take  currency,  you  re- 
member, not  because  of  any  inherent  quality  of 


200  SOCIAL,    SERVICE. 

the  material  of  which  it  is  made,  but  because,  for 
some  reason  or  other  no  matter  what,  they  are  con- 
fident that  other  sellers  will  take  it  in  turn.  By 
common  usage  it  is  a  certificate  of  the  possessor's 
title  to  any  commodity  in  the  market,  of  a  given 
value,  that  he  demands.  Consequently,  whoever 
parts  with  a  commodity  for  currency,  has  made  but 
half  a  trade.  His  trade  is  not  complete  until  he 
parts  with  the  currency  for  the  commodity  he  real- 
ly wants.  Then,  and  not  until  then,  does  he  give 
what  he  desires  the  less  for  what  he  desires  the 
more,  which  is  the  essential  principle  and  impulse 
of  trade,  the  principle  in  harmony  with  which 
each  party  to  a  trade  receives  greater  value  than 
he  gives. 

And  you  will  not  forget,  Doctor,  will  you,  that 
the  value  of  the  material  of  which  currency  is 
made  is  not  of  the  slightest  importance,  except  as 
it  may  affect  confidence  in  it  as  a  dependable  title 
to  commodities.  It  may  be  of  material  equal  in 
value  to  its  denomination,  or  it  may  be  of  material 
of  lower  value,  or  of  no  value  at  all.  So  long  as 
it  passes  current  it  is  currency. 

But  while  that  is  so  of  money  for  currency  pur- 
poses, it  is  not  so  of  money  in  its  use  as  a  standard 
for — no,  just  wait  a  minute,  won't  you,  until  I 
think  of  that.  I  was  going  to  say  "standard  for 
measuring  values,"  but  I  don't  believe  that  this 
phrase  is  very  accurate.  I  fear  it  may  be  mis- 
leading. We  usually  measure  values  by  the  money 
symbol,  algebraically,  as  it  were — by  the  dollar 
mark,  the  pound-sterling  mark,  and  so  forth. 
But  the  service  that  the  value  of  the  material  of 
which  money  is  made  performs,  is  distinctively 
more  in  the  nature  of  a  measure  for  deferred  pay- 
ments and  of  a  storage  place  for  labor. 

Yes,  we  also  store  labor  in  wheat  or  corn  or  fur- 
niture, or  anything  else  that  labor  produces.  But 
in  those  things  we  store  only  one  kind  of  labor, 


CREDITS    AND    ACCOUNTING.  201 

as  a  rule — the  kind  of  labor  that  produces  the 
particular  thing — and  only  very  temporarily,  too. 
The  utility  of  such  things  usually  passes  quickly 
away,  and  their  value  with  it;  and  they  are  not 
easily  traded  for  other  things  at  all  times,  nor 
can  they  be  readily  altered  from  a  commodity  use- 
ful in  the  arts  to  a  currency  useful  in  transferring 
accounts,  and  then  back  again  as  occasion  requires. 
The  material  fit  for  money  for  deferred  payments 
and  labor  storage  should  be  of  considerable  value 
relatively  to  its  bulk ;  it  should  be  durable ;  and  it 
should  be  capable  of  being  transformed  from  a 
commodity  into  many  currency  pieces  of  various 
denominations,  and  back  again,  with  the  least  pos- 
sible labor  cost  and  the  least  possible  wear  and 
tear.  And  it  must  be  something  which  labor  pro- 
duces. For  you  will  remember,  Doctor,  that  labor 
is  the  real  measure  of  values.  It  is  the  irksome- 
ness  of  work  that  determines  the  value  of  the 
things  produced,  and  of  everything  else  within  the 
circles  of  trade.  Things  are  worth  the  work  their 
possession  saves. 

But  for  valuation  purposes  we  must  have  units, 
and  it  is  impossible  to  define  a  unit  of  work  in 
terms  of  work.  We  may  indeed  assume  ideal 
labor  units  for  purposes  of  abstract  reasoning, 
much  as  in  geometry  we  assume  ideal  points,  lines 
and  surfaces ;  but  the  variations  of  labor  power  in 
different  persons  are  too  subtle  for  us  to  specify 
a  labor  unit  by  any  time  measurement,  or  human 
energy  measurement,  or  anything  of  that  sort. 
The  serviceability  of  the  day's  labor  of  one  man 
differs  from  the  serviceability  of  the  day's  labor  of 
another,  as  the  minds  and  muscles  and  tempera- 
ment and  tastes  and  training  of  the  men  differ. 
We  accomplish  the  same  thing,  however,  for  all 
practical  purposes,  by  referring  to  a  given  quan- 
tity, and  quality  of  some  generally  desired  product 
of  labor  as  a  concrete  expression  of  the  labor  unit 


202  SOCIAL    SERVICE. 

Possessing  this  product  we  have  a  storage  of  labor 
units  according  to  its  quantity  and  quality — labor 
units  of  anything  we  want,  mind  you,  and  not 
merely  of  the  particular  product  used  for  storing 
them. 

Yes,  the  value-measuring  factor  is  present  in 
that  commodity.  If  it  were  not,  the  commodity 
wouldn't  serve  as  a  storage  for  labor  and  an  ex- 
pression of  labor  units.  Yes  again,  the  com- 
modity may  be  used  as  currency.  I  haven't  in- 
tended to  imply  that  "intrinsic  value  money,"  as 
it  is  sometimes  called,  is  not  usable  for  currency, 
nor  that  it  is  not  usable  for  a  measure  of  values. 
What  I  mean  is  that  these  are  not  its  distinctive 
qualities.  Other  things,  not  necessarily  depend- 
ent in  any  way  upon  "intrinsic  value  money,"  may 
serve  as  currency;  and  there  are  other  methods 
of  measuring  values.  But  the  material  of  "intrin- 
sic value  money"  affords  the  only  means  of  actu- 
ally storing  up  units  of  labor  in  such  a  manner 
as  to  release  them  at  will  and  approximately  unim- 
paired. Although  the  same  effect  may  be  pro- 
duced by  means  of  loans,  yet,  for  labor-storage 
purposes,  these  are  only  agreements  to  return  the 
storage  material  or  its  equivalent.  It  is  the 
material,  after  all,  in  which  the  labor  units  are 
stored. 

Now,  to  go  on  with  the  effect  of  currency  in 
lessening  the  friction  of  complex  trading.  We 
have  already  noted  the  fact  that  as  the  circles  of 
trade  become  more  and  more  involved,  even  cur- 
rency is  inadequate  to  overcome  increasing  fric- 
tion. Similar  effects  to  those  noted  in  connection 
with  pure  barter  are  observable.  Dangers  of  loss 
and  of  robbery,  together  with  the  labor  involved 
in  handling  currency  in  large  quantities,  and  the 
difficulties  often  in  the  way  of  obtaining  it  be- 
cause of  its  relative  scarcity,  would  naturally  oper- 
ate— don't  you  think? — to  create  a  demand  for 


CREDITS    AND   ACCOUNTING.  203 

easier  and  better  methods  of  credits  and  account- 
ing in  social  service. 

It  seems  to  me  that  book-keeping  might  be  ex- 
pected to  develop  new  possibilities  under  those 
circumstances;  that  traders,  instead  of  passing 
currency  with  every  transaction,  would  fall  more 
and  more  into  the  habit  of  keeping  mutual  ac- 
counts and  of  using  currency  only  to  settle  bal- 
ances. That  is  the  way  the  storekeepers  did,  you 
remember,  when  you  and  I  went  over  to  town 
with  grandfather  to  trade.  But  with  increase 
in  the  volume  and  complexity  of  mutual  accounts, 
due  to  the  still  greater  extension  and  intensity  of 
trading,  there  would  naturally  be  a  new  demand 
for  currency  in  order  to  settle  balances,  and  this 
would  tend  to  re-create  friction  by  making  cur- 
rency dear.  At  any  rate  that  would  be  so  if  the 
quantity  theory  of  money  is  sound,  and  I  know 
that  you  accept  that  theory.  And  what  do  you  sup- 
pose would  happen  now?  Isn't  it  reasonable  to 
expect  that  some  new  device  would  spring  up  to 
keep  down  the  value  of  currency?  I  don't  know 
what  you  think  about  it,  but  I  should  expect 
something  like  banks  and  clearing  houses  to  come 
in — common  bookkeepers  who  would  lessen  the  de- 
mand for  currency  relatively  to  the  volume  of 
trade  by  expanding  the  utilities  of  bookkeeping. 
And  isn't  that  precisely  what  has  happened.  Im- 
agine the  enormous  supply  of  currency  that  would 
be  necessary  to  make  intermediate  payments  with 
the  present  volume  of  trade,  if  it  were  not  for  the 
bookkeeping  facilities  which  bank  checks  afford. 

The  actual  history  of  the  thing  I  can't  give  you. 
Neither  can  anyone  else  except  in  a  very  super- 
ficial and  incomplete  manner.  But  isn't  it  fairly 
evident  that  trading  must  have  been  at  first  by 
means  of  barter — supplemented,  perhaps,  by  some 
crude  modes  of  credit,  like  those,  for  instance, 


204  SOCIAL    SERVICE. 

that  our  folks  used  to  give  to  old  Aunt  Famy 
when  she  would  trudge  across  the  fields  to  our 
house  to  "borry"  molasses  or  coffee  or  sugar,  and 
promise  to  "bring  'em  back  next  week,"  after  she 
had  been  "over  to  town  to  trade"  ?  But  it  is  only 
in  the  simplest  and  most  neighborly  conditions 
that  barter,  even  when  supplemented  with  friendly 
borrowing,  could  have  been  the  sole  method  of 
trading.  As  soon  as  it  had  begun  to  extend,  cur- 
rency would  be  necessary;  some  common  medium 
of  trade;  something  that  everybody  within  the 
common  circles  of  trade  would  accept,  not  from  a 
desire  of  much  of  that  particular  thing,  nor  for 
any  of  it  at  that  particular  time  it  might  be, 
but  from  confidence  that  any  one  else  would  take 
it  at  any  time  for  anything.  Furs  or  cattle  might 
be  utilized  as  currency  for  a  while,  but  as  these  do 
not  long  retain  their  utility  and  value,  and  can- 
not without  permanent  loss  be  divided  and  restored 
again  to  suit  changing  needs,  wouldn't  it  be  rea- 
sonable to  infer,  even  if  there  were  no  historical 
evidence,  that  metals  would  eventually  take  their 
place — such  metals  as  are  easily  carried  and  easily 
stored,  and  such  as  are  but  slowly  consumed  or 
worn  away,  and  the  particles  of  which  may  be  sep- 
arated and  reunited  over  and  over  again  without 
much  labor  and  without  prejudice  to  their  utility 
and  value  ?  It  certainly  is  an  inference. 

And  these  inferences  have  a  considerable  sup- 
port from  history.  Various  products — furs, 
cattle,  leather,  shells,  etc., — have  been  used  as  cur- 
rency, and  in  primitive  places  some  of  them  ate 
used  yet.  But  they  have  been  superseded  by 
metal,  owing  to  its  greater  adaptability.  Among 
the  metals,  silver  was  long  the  favorite  for  "intrin- 
sic value  money,"  but  gold  has  come  into  prin- 
cipal use  for  that  purpose.  Kelatively  to  the  vol- 
ume of  trade,  however,  neither  silver  nor  gold  is 
any  longer  much  employed  as  currency,  as  you 


CREDITS    AND   ACCOUNTING.  205 

know.  Government  notes  and  bank  notes  are  most 
common.  The  metals  are  hardly  used  at  all,  ex- 
cept as  pocket  money  and  for  labor-storage  pur- 
poses in  reserve  funds. 

At  first,  no  doubt,  silver  and  gold  passed  as 
commodities.  The  historical  evidence  of  this  is 
abundant,  and  we  are  not  without  examples  in 
some  parts  of  the  world  even  in  very  recent  times. 
Those  who  handled  them  much,  carried  scales  to 
try  the  weight  and  acids  to  test  the  quality  of 
what  they  received.  An  improvement  upon  that 
custom  came  with  their  use  as  authorized  cur- 
rency, symbols  of  weight  and  fineness  being 
itamped  upon  pieces  of  the  metal  of  various  sizes 
and  values.  In  other  words,  the  metals  were 
"coined." 

The  theory  of  "coining"  is  that  government  cer- 
tifies to  the  quantity  and  quality  of  the  metal  in 
the  coin,  thereby  protecting  the  ignorant  from  im- 
position and  relieving  the  prudent  from  the  ne- 
cessity of  using  scales  and  acids  with  every  trade. 
But  governments  have  not  always  been  faith- 
ful in  this  respect.  They  have  frequently 
taken  coinable  metals  of  certain  values  and 
stamped  them  with  higher  values.  This  is  the 
way,  I  understand,  that  the  pound  of  silver  got 
reduced  as  a  coin  to  a  small  fraction  of  a  pound. 
Whenever  it  debased  its  coinage,  the  government 
kept  the  surplus  metal  and  called  it  "seigniorage." 
An  easy  way,  wasn't  it? — to  collect  taxes  with- 
out taking  the  taxpayer  into  your  confidence. 
Easier  than  our  own  methods  of  indirect  taxa- 
tion. And  it  wasn't  as  oppressive,  either,  except 
upon  persons  who  used  coins  for  labor-storage. 
Those  who  used  them  simply  for  currency,  passing 
them  out  as  soon  as  they  took  them  in,  lost  hardly 
anything. 

When  intermediate  payments  were  made  chiefly 
by  means  of  gold  and  silver  currency  or  money, 


206  SOCIAL    SERVICE. 

wouldn't  you  suppose  that  the  hoarding  of  those 
metals  must  have  been  a  favorite  method  of  "sav- 
ing up  against  a  rainy  day"  ?  Seems  so  to  me.  It 
wasn't  all  honest  hoarding,  either,  I  guess.  You 
remember  those  old  stories  of  pirates  and  their 
buried  treasure,  don't  you,  that  you  and  I  used 
to  read  in  the  haymow  of  a  Sunday  afternoon,  or 
down  on  the  creek  bank  in  the  intervals  of  going 
in  swimming?  May  be  honest  folks  didn't  bury 
their  gold  and  silver  coins,  but  they  hoarded  them 
somewhere,  I  reckon.  Even  if  they  didn't  hoard 
them,  they  had  to  have  a  good  supply  on  hand  for 
currency  according  to  their  needs,  which  must 
have  been  frequent  and  in  pretty  large  amounts 
among  the  nicest  people — those  who  lived  honor- 
ably in  the  sweat  of  other  men's  faces,  you  know. 

But  whether  hoarded  for  saving  or  kept  on  hand 
for  use  as  currency,  gold  and  silver  coins  would 
certainly  have  been  good  plunder  for  thieves.  And 
they  do  say  that  this  is  what  brought  about  the 
use  of  checks  on  banks,  which  is  now  so  common. 
I  don't  vouch  for  the  story,  for  I'm  no  historian ; 
but  it  seems  that  persons  possessed  of  gold  and 
silver  coins  and  without  safe  places  of  their  own 
in  which  to  keep  them,  but  who  were  customers 
of  some  silversmith,  used  to  deposit  their  coins 
with  him  to  be  put  into  the  receptacle  he  kept  for 
the  exceptionally  valuable  materials  of  his  handi- 
craft— gold  and  silver,  you  know. 

In  the  beginning,  these  coins  deposited  with  sil- 
versmiths for  safety,  were  no  doubt  carefully  kept 
by  them  as  special  deposits ;  that  is,  they  expected 
to  return  to  their  customers  the  identical  coins. 
But  sometimes  a  depositor  would  call  for  his  de- 
posit, or  part  of  it,  not  by  withdrawing  it  bodily 
himself,  or  through  a  servant,  but  by  giving  in  in- 
termediate payment  to  somebody  he  owed,  a  writ- 
ten order  upon  his  smith  to  deliver  the  specified 


CREDITS    AND   ACCOUNTING.  207 

amount  to  that  person.  By  "intermediate  pay- 
ment," I  don't  mean,  you  understand,  what  law- 
yers might  mean.  They  might  mean  conditional 
payment;  but  I  mean  absolute  payment,  though 
in  a  form,  money,  which  is  not  final  payment,  be- 
cause that  is  not  what  the  payee  finally  wants.  Well, 
when  both  the  drawer  of  this  order  and  the  payee 
happened  to  be  depositors  with  the  same  silver- 
smith, the  payee  didn't  always  withdraw  the  coins. 
Sometimes  he  would  ask  the  smith  to  shift  them, 
or  so  much  of  them  as  the  order  called  for,  from 
the  drawer's  deposit  in  the  vault  to  his  own.  This 
accomplished  the  purpose — don't  you  see  it  did  ? — 
of  both  drawer  and  drawee.  And  something  simi- 
lar occurred  even  when  the  drawer  of  the  order  and 
the  drawee  didn't  happen  to  be  depositors  with 
the  same  silversmith.  In  that  case  the  drawee 
often  saved  himself  trouble  by  asking  his  own 
smith  to  go  or  send  and  get  from  the  other  the 
coins  called  for  by  the  order;  and  when  the  two 
smiths  came  together  in  that  connection,  it  some- 
times turned  out  that  each  of  them  held  orders 
against  the  other.  Now,  what  do  you  suppose 
would  probably  happen  then  ?  Why,  if  the  amounts 
balanced,  no  transfer  of  coins  would  have  been 
made  either  way.  What  would  be  the  use  of  those 
silversmiths  lugging  coins  back  and  forth  if  they 
could  save  the  trouble  and  accomplish  the  same 
result  by  merely  exchanging  little  pieces  of  paper 
and  making  a  few  simple  entries  in  a  set  of  books? 
And  if  there  had  been  a  balance  either  way,  well 
what  would  be  the  use  of  lugging  coins  either  way 
to  any  greater  amount  than  the  balance?  If  the 
balance  were  small,  or  similar  transactions  had 
got  to  be  of  frequent  occurrence  among  silver- 
smiths, it  is  probable  that  even  the  balance 
wouldn't  be  carried  either  way  in  coins  with  every 
transaction,  but  that  mutual  accounts  would  be 


208  SOCIAL     SERVICE. 

kept  and  balances  adjusted  with  coins  only  now 
and  then. 

After  a  time  the  more  observant  smiths  noticed 
a  curious  fact.  They  noticed  what  we  now  realize 
was  bound  to  occur,  that  a  proportion  of  all  the 
coins  deposited  in  their  vaults  never  went  out 
again.  It  was  a  great  discovery.  What  Watt's 
observation  of  the  antics  of  his  mother's  teakettle 
was  to  steam  power,  that  observation  of  those  as- 
tute silversmiths  was  to  modern  banking  in  so  far 
as  depositing  and  checking  are  concerned.  With 
an  eye  to  the  main  chance,  no  doubt,  those  old 
silversmiths  took  advantage  of  their  superior 
astuteness  of  observation  by  quietly  using  as  ma- 
terial in  their  trade  some  of  the  coins  deposited 
with  them.  It  helped  to  enrich  them  by  giving 
them  a  good  deal  of  gold  and  silver  for  the  melt- 
ing pot  without  a  farthing  of  cost  beyond  the  de- 
posit accommodation  they  were  giving  their  cus- 
tomers, and  it  didn't  harm  their  customers,  be- 
cause they  could  always  get  what  coins  they  want- 
ed. These  profitable  yet  harmless  peculations  of 
the  silversmiths — the  Big  Business  men  of  their 
time — came  out  of  that  proportion  of  deposited 
coin  which,  in  consequence  of  the  orders  passing 
between  silversmiths,  was  never  wanted  by  the  de- 
positors, taking  them  as  a  whole. 

But  wouldn't  you  infer  that  when  the  silver- 
smiths generally  came  to  realize  all  this,  compe- 
tition would  set  in  and  adjust  the  whole  thing 
upon  an  honest  basis  ?  Wouldn't  they  begin  to  en- 
courage general  instead  of  special  deposits  of 
coin?  Wouldn't  they  be  likely  to  stop  receiving 
deposits  of  coin  as  a  favor  or  for  a  storage  fee, 
and  do  it  for  the  privilege  of  being  allowed  freely 
to  use  the  gold  and  silver  coins  as  raw  material  in 
their  handicraft  ?  And  wouldn't  the  depositors  be 
satisfied  with  repayment  upon  demand  in  coin, — • 
not  necessarily  in  the  identical  coins  deposited,  but 


CREDITS    AND   ACCOUNTING.  209 

with  others  of  equal  value,  or  even  with  deposit- 
able  orders  upon  silversmiths?  That's  what  hap- 
pened, I  guess,  Doctor.  At  any  rate,  that  is  the 
way  the  story  runs,  and  it  is  essentially  what  the 
modern  hank  is  actually  doing. 

As  that  custom  developed,  while  affording  prof- 
its to  the  smiths  from  the  use  of  capital  costing 
them  nothing,  its  benefits  extended  much  far- 
ther. The  retiring  of  a  very  large  proportion  of 
gold  and  silver  from  service  as  currency  and  from 
hoards  of  saved  up  money,  tended  to  make  those 
metals  more  available  for  use  in  the  arts.  And  of 
course  trading  generally  must  have  been  freer  and 
easier  when  orders  on  smiths  served  as  substitutes 
for  currency  than  when  gold  or  silver  had  to  pass 
with  every  trade. 

All  this  appears  to  be  in  substance  historically 
true,  and  modern  banks  to  be  in  one  at  least  of 
their  functions,  an  evolution  from  a  custom  of  the 
old  silversmiths  of  London.  I  mean  the  book- 
keeping function  of  modern  banks,  for  banks  are 
really  common  bookkeepers.  Instead  of  paying 
out  and  receiving  currency  with  every  transaction, 
we  deposit  the  checks  that  we  get,  and  draw  checks 
for  the  payments  that  we  want  to  make,  and  the 
banks  shift  our  credits  accordingly  in  their  sets 
of  bookkeeping  books.  Their  pay  for  doing  this 
they  take  by  reserving  the  right  to  lend  from  65 
to  85  per  cent  of  their  depositors'  credits,  retain- 
ing the  interest  for  themselves;  the  theory  being, 
analogous  to  that  of  the  old  silversmiths,  that  a 
certain  proportion  of  the  aggregate  credits  that 
pass  through  bank  ledgers  will  never  be  checked 
out. 

By  lending  this  proportion  of  their  customers' 
credits  the  banker's  function  is  made  to  extend 
beyond  that  of  a  common  bookkeeper.  He  be- 
comes also  a  broker  in  and  insurer  of  individual 


210  SOCIAL,    SERVICE. 

credits.  Of  course  his  guild  likes  to  assume  larger 
functions.  That  is  as  natural  with  bankers  aa 
Jefferson  said  it  was  with  judges;  and  I  suppose, 
Doctor,  that  we  all  have  an  itch  to  draw  power  to 
ourselves.  So  let's  not  think  of  bankers  as  a  dif- 
ferent "run  of  shad"  because  they  want  to  add  to 
their  functions,  even  if  in  doing  so  they  do  invadt 
public  rights.  We  are  all  poor  sinners. 

One  of  the  alien  functions  that  the  banks  have 
long  tried  to  draw  to  themselves  is  the  right  to 
issue  currency  and  to  control  its  volume.  But 
here  they  run  afoul  of  the  sentiment  that  if  that 
is  anybody's  function  it  is  the  government's,  and 
ought  not  to  be  farmed  out  to  banks  or  anyone 
else.  We  won't  discuss  this  just  now,  Doctor,  but 
I  should  like  to  remark  in  passing  that  I  rather 
incline  to  think  that  the  only  normal  functions  of 
banks  are  brokerage  in  credits,  insurance  of 
credits,  and  common  bookkeeping.  They  borrow 
from  all  depositors  without  interest,  to  lend  to  one 
or  more  for  interest ;  and  to  compensate  for  taking 
that  interest,  they  do  the  common  bookkeeping  for 
all. 

This  bookkeeping  function  may  need  some  fur- 
ther exposition.  Even  you,  Doctor,  with  all  your 
familiarity  with  banking  transactions,  both  as  a 
bank  clerk  for  that  first  year  or  two  after  we  got 
home  from  college,  and  as  a  bank  customer  ever 
since — I  doubt  if  even  you  have  reflected  upon  the 
significance,  with  reference  to  social  service,  of 
this  bookkeeping  function.  Just  listen,  then,  for 
a  few  minutes  longer. 

Let  us  think  of  a  group  of  men  as  interchanging 
serviceable  commodities.  You  remember  that  in 
primitive  barter  each  must  have  or  must  get  ex- 
actly what  the  other  wants,  or  else  there  is  no 
trade.  But  then  comes  currency,  whereupon  eith- 
er can  sell  what  the  other  wants  to  buy,  and  use 
the  currency  to  buy  of  some  one  else  what  he 


CREDITS    AND   ACCOUNTING.  211 

wants  himself.  This  facilitates  trading.  But  as 
the  carrying  of  currency  back  and  forth  becomes 
irksome  and  risky  in  consequence  of  increased 
trading,  we  have  mutual  accounts;  and,  mutual 
accounts  becoming  in  great  measure  impracticable, 
as  the  circles  of  trade  extend  and  interlace,  the 
same  law  of  human  nature  that  gave  us  currency 
and  mutual  accounts  will  now  give  us  banks, 
which  in  turn  and  under  similar  pressure  will  give 
us  clearing  houses. 

Here  we  have,  then,  a  wonderful  extension  of 
the  bookkeeping  principle,  for  that  is  what  it  is. 
Checks  that  go  to  banks  are  nothing  but  orders  to 
bookkeepers  to  transfer  credits  from  one  custo- 
mer's account  in  the  books  of  the  bank,  to  an- 
other's ;  and  as  the  clearing  house  merely  does  for 
all  the  banks  of  a  group  what  each  bank  does  in 
this  respect  for  its  own  customers,  bookkeeping 
would  adjust  the  entire  volume  of  trade  if  all 
banks  were  connected  with  one  clearing  house  and 
all  traders  were  depositors  in  a  bank.  To  that 
ideal  perfection  the  bookkeeping  principle  of 
credits  and  accounting  in  the  mechanism  of  social 
service  may  never  attain;  but  the  nearer  the  ap- 
proach to  the  ideal,  the  greater  will  be  the  advan- 
tage realized.  Normally,  you  know,  Doctor,  nor- 
mally; without  considering  the  pathology  of  the 
subject. 

True,  very  true;  some  folks  do  not  understand 
how  a  trade  between  widely  separated  strangers 
could  be  accomplished  without  money.  I  reckon 
you  really  do,  but  all  the  same,  since  you  have 
made  the  remark,  I  am  going  to  risk  boring  you 
about  it,  so  that  I  may  be  sure  that  you  have  the 
same  understanding  of  the  matter  that  I  have. 

Though  each  of  those  strangers  were  too  far 
separated  as  participants  in  social  service  to  be 
able  to  use  mutual  accounts,  or  even  checks,  ^  be- 
tween themselves,  yet  they  are  linked  together  in  a 


212  SOCIAL     SERVICE. 

chain  of  traders,  each,  of  whom  knows  the  trader 
immediately  before  and  the  one  immediately  after 
himself  in  the  chain. 

For  instance,  here  is  a  farmer  in  Kansas,  and 
yonder  is  a  shoe  factory  foreman  in  Massachusetts. 
They  don't  know  each  other.  Neither  would  give 
credit  to  the  other,  and  neither  would  take  the 
other's  check  for  goods.  Yet  the  factory  foreman 
may  buy  corn  of  the  farmer  without  money;  and 
the  farmer,  also  without  money,  may  buy  the  fac- 
tory foreman's  share  of  the  shoes  he  has  helped  to 
make. 

The  foreman,  let  us  say,  keeps  an  account  in  the 
village  bank  where  he  lives.  He  takes  a  check 
from  his  employer  for  his  wages  and  deposits  it 
in  his  bank.  This  check  is  essentially  the  con- 
summation of  an  advance  sale  from  himself  to  his 
employer  of  his  share  in  a  quantity  of  shoes  that 
have  been  made  under  his  direction  as  foreman. 
The  employer  sells  the  shoes  to  a  Boston  house, 
and  the  Boston  house  sells  some  of  them  to  a 
house  in  St.  Louis,  which  sells  some  to  a  house  in 
Topeka,  which  sells  some  to  the  village  storekeep- 
er at  Hymer,  near  where  the  Kansas  farmer  in 
question  lives.  In  actual  experience,  those  shoes 
would  probably  go  more  directly  from  Massa- 
chusetts to  Kansas;  but  then  the  problem  of  pay- 
ment by  checks  would  be  simple,  too  simple  for 
illustrative  purposes,  and  I  am  trying  to  make  it 
•ufficiently  complex  to  be  illustrative. 

Now  observe,  Doctor,  that  the  Hymer  store- 
keeper has  paid  for  that  invoice  of  shoes  with  a 
check  upon  his  village  bank,  which  has  set  in  mo- 
tion a  series  of  bookkeeping  entries  at  various 
points  from  Kansas  to  Massachusetts,  including 
Topeka,  St.  Louis  and  Boston.  The  result  is  that 
the  balance  which  would  otherwise  be  to  the  credit 
of  the  Kansas  storekeeper  in  the  Hymer  bank,  has 
passed  to  the  credit  of  the  factory  foreman  in  the 


CREDITS    AND   ACCOUNTING.  213 

Massachusetts  village  bank,  In  consequence  of  his 
having  deposited  to  his  own  account  the  check 
from  his  employer. 

Meanwhile,  the  farmer  has  sold  corn  to  th* 
Hymer  grain  buyer  and  received  a  check  upon  tht 
Hymer  bank,  if  there  is  a  bank  there;  or  upon  a 
Topeka  bank,  it  maybe ;  at  any  rate  upon  the  sanit 
bank  in  which  he  keeps  his  own  account.  This 
check  the  farmer  deposits  in  the  Kansas  bank, 
whether  at  Hymer  or  elsewhere,  with  which  he 
does  business.  And  what  has  happened  to  the 
corn  ?  Why  the  local  grain  buyer  has  sold  it  to  t 
Kansas  City  grain  buyer  and  taken  the  latter's 
check ;  the  Kansas  City  grain  buyer  has  sold  it  to 
a  Chicago  house,  taking  its  check;  the  Chicago 
house  has  sold  to  a  New  York  house,  taking  its 
check;  and  the  New  York  house  has  sold  to  a 
storekeeper  in  the  Massachusetts  village  where  the 
shoes  were  made,  taking  his  check. 

Observe  now  that  the  factory  foreman's  shoes 
have  reached  the  Kansas  village  store;  that  the 
Kansas  corn  has  reached  the  Massachusetts  vil- 
lage store;  and  that  the  shoes  have  been  paid  for 
by  a  series  of  checks,  beginning  with  one  drawn 
upon  the  Kansas  bank,  and  ending  with  a  corre- 
sponding deposit  in  the  Massachusetts  bank.  Cur- 
rency has  not  been  disturbed  at  either  end.  There 
is  the  same  amount  of  currency  in  each  village 
as  if  those  transactions  had  not  occurred.  Even 
the  credits  in  the  banks  are  undisturbed.  The 
only  difference  is  this,  that  the  Massachusetts  fac- 
tory foreman  has  a  larger  credit  in  his  bank  ac- 
count, which  has  come  through  a  series  of  banking 
transactions  from  the  Kansas  storekeeper ;  and  the 
Kansas  farmer  has  a  larger  credit  in  his  bank  ac- 
count, which  has  come  through  a  series  of  banking 
transactions  from  the  Massachusetts  storekeeper. 
Although  the  amount  in  the  bank  at  each  terminus 
of  the  series  of  exchanges  is  the  same  as  before,  it 


214  SOCIAL    SERVICE. 

has  been  transferred  to  a  different  depositor,  some- 
what as  in  the  old  days  of  the  silversmiths  there 
was  the  same  amount  of  gold  and  silver  coin  in  a 
smith's  vault  after  a  deposit  or  a  draft  as  before, 
but  the  title  to  some  of  it  had  been  transferred 
from  one  depositor  to  another. 

Now  the  factory  foreman  may  go  to  the  Massa- 
chusetts village  store  and  with  his  check  buy  corn, 
while  the  Kansas  farmer  goes  to  the  Kansas  vil- 
lage store  and  with  his  check  buys  shoes.  The 
balances  in  both  village  banks  are  then  shifted 
again,  that  of  the  foreman  being  trans- 
ferred to  the  Massachusetts  storekeeper 
and  that  of  the  farmer  being  transferred 
to  the  Kansas  storekeeper.  Each  intermediate 
party  to  this  series  of  exchanges  will  in  due  course 
have  received  back  all  that  he  expended,  with  his 
profit  added;  and  the  factory  foreman  will  have 
obtained  in  exchange  for  his  share  in  the  shoes 
what  he  desired  more  than  shoes,  while  the  farmer 
will  have  obtained  in  exchange  for  the  corn  what 
he  desired  more  than  the  corn.  And  yet  no  money 
will  have  passed.  Those  two  men,  so  far  apart 
and  utter  strangers,  will,  without  money,  have 
made  a  swap  of  one  man's  corn  product  for  the 
other  man's  shoe  product. 

Most  exchanges  are  effected  in  this  way,  as  you 
know,  Doctor.  The  process  may  be  in  some  re- 
spects more  intricate  and  in  others  less  so,  but  the 
principle  is  the  same. 

People  who  have  no  bank  account  must  of  course 
use  more  currency,  dollar  for  dollar,  than  those 
who  do  have  bank  accounts ;  but  even  such  people 
transact  much  of  their  business  by  means  of  book- 
keeping, for  they  often  have  open  accounts  at 
stores  which  they  settle  with  store  orders  or  the 
checks  of  bank  depositors  with  whom  they  happen 
to  have  other  financial  relations.  They  also  handle 
bills  of  exchange  and  postal  orders,  or  notes,  or 


CREDITS    AND   ACCOUNTING.  215 

all;  and  every  one  of  those  bits  of  paper  belongs 
to  the  bookkeeping  as  distinguished  from  the  cur- 
rency mode  of  effecting  exchanges  of  social  serv- 
ice. All  are  orders  upon  bookkeepers — part  of  the 
mechanism  of  the  clearing  house  principle. 

In  foreign  trade,  bills  of  exchange  serve  instead 
of  bank  checks.  But  bills  of  exchange,  though 
they  differ  slightly  in  form,  are  in  principle  indis- 
tinguishable from  checks.  Both  are  merely  written 
instructions  to  bookkeepers. 

The  use  of  the  bill  of  exchange  is  said  to  have 
grown  out  of  the  necessity  for  guarding  against 
the  dangers  of  transporting  gold  and  silver.  There 
were  shipwrecks,  you  know,  and  highwaymen,  and 
pirates  in  the  old  days.  And  even  in  those  days 
there  was  governmental  plundering  of  strangers 
who  had  "more  money  than  the  law  allowed,"  as 
you  and  I  said  to  Pearson's  bound  boy  that  time 
when  he  had  three  pennies  and  we  hadn't  any, 
and  three  pennies,  as  we  explained  to  him,  would 
buy  "just  enough  chewing  gum  for  the  crowd." 
I  believe  that  the  credit  for  inventing  bills  of  ex- 
change is  given  to  the  Jews.  But  never  mind  about 
that.  They  just  had  to  invent  them  in  order  to 
protect  their  property  from  a  type  of  Christians 
who  were  afraid  the  poor  Jew  might  not  get 
through  the  needle's  eye,  and  there's  not  much 
merit  in  doing  what  you  have  to  do.  Anyhow, 
you  and  I  are  not  concerned  so  much  about  who 
invented  bills  of  exchange  as  we  are  about  the 
way  in  which  they  work  in  the  mechanism  of  so- 
cial service. 

Well,  you  see,  a  trader  in  one  country  who  ex- 
pected to  make  payments  in  another,  and  was 
afraid  of  shipwreck,  or  pirates,  or  governmental 
"protection,"  would  open  friendly  credit  relations 
with  some  one  in  the  latter  country;  and  upon 
making  his  payments,  instead  of  shipping  gold  or 
silver,  he  would  ship  bills  of  exchange.  These  be- 


216  SOCIAL    SERVICE. 

ing  honored  satisfactorily  when  and  where  pay- 
able, were  charged  by  the  payer  to  the  drawer. 
Conversely,  if  a  payment  needed  to  be  made  by  a 
trader  in  the  second  country  to  one  in  the  first,  he 
also  would  forward  a  bill  of  exchange  or  draft 
upon  a  friendly  concern,  instead  of  sending  gold 
and  silver,  and  a  charge  would  be  made  against 
him.  If  these  drafts  happened  to  be  for  the  same 
amount,  one  balanced  the  other,  and  no  gold  or 
silver  changed  countries  in  consequence  of  that 
trade.  If  they  were  unequal,  the  difference  was 
adjusted  by  a  shipment  of  gold  or  silver  to  the 
amount  merely  of  the  difference;  or  else  the 
account  was  allowed  to  stand  open,  and  the  bal- 
ance fluctuated  from  time  to  time  one  way  or  the 
other  as  further  drafts  were  sent  or  received. 

Out  of  this  custom  among  traders  there  grew 
up  eventually  a  system  of  bookkeeping  between 
traders  of  different  countries,  which  bankers  con- 
ducted. That  is  to  say,  a  business  of  dealing  in 
foreign  drafts  evolved.  A  dealer  in  drafts  in  one 
country  would  open  credit  relations  with  one  in 
another  country,  and  then  they  would  buy  and 
sell  the  drafts  of  traders.  A  trader  who  wished 
to  pay  a  foreign  debt  would  try  to  buy  a  draft.  If 
the  difficulties  of  transporting  gold  and  silver  were 
great,  the  cost  of  the  draft  would  be  high ;  if  they 
were  slight,  the  cost  of  the  draft  would  be  low. 
And  that  is  the  way,  Doctor,  in  which  payments 
are  made  between  dealers  in  different  "countries, 
even  unto  this  day. 

When  a  merchant  in  New  York,  for  example, 
ships  apples  to  London,  and  a  merchant  in  Lon- 
don ships  canned  fruit  to  New  York,  two  book- 
keeping entries  on  the  debit  side  are  made,  one  in 
New  York  against  the  London  consignee,  and  one 
in  London  against  the  New  York  consignee;  and 
upon  the  basis  of  those  entries  bills  of  exchange 
are  drawn.  This  may  be  done  by  the  shippers,  or 


CREDITS    AND    ACCOUNTING.  217 

the  shippers  may  sell  the  right  to  do  it  to  bankers, 
taking  pay  in  local  bank  checks.  At  that  stage  of 
the  transaction,  New  York  owes  London  a  certain 
amount  and  London  owes  New  York  let  us  say  the 
same  amount. 

In  very  truth  neither  city  owes  the  other  any- 
thing. An  individual  in  London  owes  an  individ- 
ual in  New  York,  and  an  individual  in  New  York 
owes  an  individual  in  London.  But  it  is  easier 
just  to  say  London  and  New  York. 

The  draft  upon  London  finds  its  way  through 
bankers  there  to  the  account  book  in  which  New 
York  is  charged  for  canned  fruit,  and  being  there- 
in entered  as  a  credit  item,  it  offsets  that  charge; 
the  draft  against  New  York  finds  its  way  through 
New  York  traders  and  bankers  to  the  account  book 
in  New  York  in  which  London  is  charged  for  ap- 
ples, and  it  similarly  offsets  that  charge.  Canned 
fruit  will  then  have  been  exchanged  for  apples 
between  the  two  countries — England  and  the 
United  States, — and  all  accounts  are  squared. 

Of  course  the  details  might  be  much  more  intri- 
cate, but  the  principle  would  be  unchanged. 
Though  very  few  if  any  individual  transactions 
exactly  offset  other  individual  transactions,  that 
fact  makes  no  essential  difference.  When  a  banker 
in  New  York  comes  into  possession  of  several 
bills  of  exchange  of  various  amounts  against  Lon- 
don, he,  by  forwarding  them  to  his  London  corre- 
spondent and  charging  the  total,  acquires  the 
right  to  draw  upon  his  correspondent  any  number 
of  drafts  for  any  amount  not  exceeding  that  total. 
This  enables  him  to  sell  drafts  upon  London  for 
any  amount  to  persons  who  demand  commodities 
from  places  where  London  drafts  are  receivable, 
just  as  a  bank  depositor,  by  forwarding  to  his 
bank  all  the  checks  that  may  be  given  him  acquires 
the  right  to  draw  upon  that  bank.  And  when  all 
that  London  owes  to  New  York  is  set  off  against 


218  SOCIAL     SERVICE. 

all  that  New  York  owes  London,  the  balance  is 
what  New  York  would  be  required  to  pay  or  be 
entitled  to  receive  in  gold,  if  there  were  no  other 
cities  within  the  circles  of  trade.  But  as  there  are 
other  cities,  the  balance  owed,  say,  by  New  York 
to  London,  may  be  offset  by  a  balance  owed  by 
Berlin  to  New  York,  while  Berlin's  debt  to  New 
York  is  offset  by  one  from  Paris  to  Berlin,  and 
that  of  Paris  by  one  from  Madrid,  which  in  turn 
is  offset  by  one  from  Brazil  and  that  by  one  from 
London.  Taken  together,  don't  you  see,  there 
would  then  be  no  balance.  All  accounts  would  be 
squared.  Even  if  there  were  a  balance,  interna- 
tional trading  goes  on  continuously,  just  like  trad- 
ing "over  to  town"  used  to,  and  consequently  bal- 
ances shift.  When  all  the  trading  centers  of  the 
world,  and  all  the  commodities  in  the  circles  of 
trade,  are  considered  together,  and  a  sufficient 
time  is  allowed  for  the  reaction  that  invariably 
follows  action,  or,  in  commercial  terms,  for  the 
exports  that  follow  imports  and  the  imports  that 
follow  exports,  there  is  no  balance  for  or  against 
any  locality,  except  such  as  may  be  traced  to  one- 
sided payments.  Among  these  are  payments  for  the 
purchase  of  land,  for  the  rent  of  land,  for  loans, 
for  interest  on  loans,  for  investments  and  for 
profits  on  investments,  for  tribute  of  some  kind  or 
other,  and  for  gifts.  Yes,  gold  may  have  to  go 
one  way  or  another,  and  it  may  be  said  that  it 
goes  in  settlement  of  balances.  But  gold  is  a 
labor  product  and  goes  as  a  commodity,  just  as 
corn  and  wheat  do.  In  normal  conditions  it  would 
be  shipped  much  more  for  use  in  the  arts  than  for 
the  highly  uneconomical  purpose  of  merely  set- 
tling balances. 

Exchanges  of  commodities  tend,  you  see,  to 
equalize  balances  between  trading  centers.  And 
they  do  it — pathological  conditions  apart.  Some 
cities  become  clearing  houses  or  central  bookkeep- 


CREDITS    AND   ACCOUNTING.  219 

ers  for  the  surrounding  territory;  others  become 
clearing  houses  or  central  bookkeepers  for  these; 
and  one  ultimately  becomes  the  common  clearing 
house  or  bookkeeper  for  all.  A  village,  for  in- 
stance, is  the  central  bookkeeper  for  producers 
within  the  influence  of  its  commercial  attraction; 
the  neighboring  city  is  to  its  dependent  villages 
what  they  are  to  the  adjacent  country;  the  great 
trading  city  of  the  country  is  to  the  smaller  ones 
what  they  are  to  the  villages ;  and  the  great  trad- 
ing city  of  the  world  is  the  same  to  all  the  other 
cities.  London,  you  know,  is  the  clearing  house 
for  the  world.  In  the  same  sense  New  York  is 
the  clearing  house  for  the  United  States,  Chicago 
is  the  clearing  house  for  the  western  region  of 
which  it  is  the  commercial  center;  the  village  of 
Herkimer  is  the  clearing  house  for  the  little  farm- 
ing territory  that  spreads  out  before  it  at  the  foot 
of  the  Adirondacks. 

Now  notice  this — a  draft  drawn  upon  London 
is  good  anywhere  in  the  world.  You  know  that, 
but  do  you  know  the  reason  ?  The  reason  is  that 
London  is  the  market  city  of  the  world,  the  center 
of  the  world's  exchanges.  Goods  go  from  there  in 
every  direction.  Consequently  its  people  have 
debtors  in  every  direction.  And  because  it  is  easier, 
cheaper  and  safer,  those  debtors  would  rather  pay 
their  debts  with  drafts  than  with  gold.  For  simi- 
lar reasons  a  check  or  draft  upon  the  center  of  ex- 
changes in  any  territory  is  more  acceptable  than 
one  upon  a  place  in  the  same  territory  from  which 
goods  go  only  in  some  directions  but  not  in  all. 
Such  drafts  will  as  a  rule  command  a  premium, 
which  is  more  or  less  according  to  the  expense  of 
shipping  currency  and  insuring  its  delivery.  It 
is  true  enough  to  be  sure,  that  debts  for  goods  are 
owed  by  the  center  of  exchanges  no  less  than  to  it. 
But  mark  you,  Doctor;  drafts  upon  centers  find 
debtors  to  the  centers  everywhere,  and  may  there- 


220  SOCIAL     SERVICE. 

fore  be  used  to  pay  obligations  not  only  at  tfia 
centers  upon  which  they  are  drawn,  but  anywhere 
else  in  the  territory;  whereas  drafts  upon  minor 
points  are  not  likely  to  find  debtors  elsewhere,  and 
consequently  cannot  be  as  conveniently  used  for 
payments  elsewhere. 

Of  course  bills  of  exchange  have  a  market 
among  the  bankers  in  all  cities.  It  is  part  of  the 
banker's  business,  you  remember  to  utilize  these 
orders  upon  bookkeepers  in  his  function  of  com- 
mon bookkeeper.  When  there  is  a  balance  owing 
by  London  to  New  York,  New  York  bankers  can 
to  the  extent  of  that  balance  draw  upon  London 
without  shipping  gold.  This  tends  to  make  a  sur- 
plus of  drafts  in  New  York  upon  London,  and 
therefore  to  place  such  drafts  at  a  discount.  Law 
of  supply  and  demand,  you  see;  our  index  finger 
law,  don't  you  remenlber?  If  goods  are  not  im- 
ported from  London  or  elsewhere  so  as  to  affect 
that  balance,  London  must  ship  gold  to  settle  the 
debt;  and  as  this  involves  expense  and  risk  with- 
out profit,  drafts  upon  London  will  rule  in  New 
York  at  a  point  as  much  below  par  approximately 
as  this  cost  would  be,  and  drafts  upon  New  York 
in  London  at  about  as  much  above  par.  When  the 
balance  is  the  other  way,  the  rate  for  drafts  is  re- 
versed. 

Inasmuch,  then,  as  an  excess  of  exports  would 
seem  to  give  us  the  right  to  draw,  and  so  make 
drafts  upon  London  cheap,  excessive  exports  are 
spoken  of  as  a  "favorable  balance  of  trade" — fav- 
orable, that  is,  to  buyers  of  drafts.  And  this  pat- 
ter slides  smoothly  off  the  tongue  of  campaign 
orators,  who  ignorantly  make  it  mean  that  a  con- 
tinuous balance  of  exports  is  a  continuously  favor- 
able balance  of  trade.  As  if  a  continuous  export 
balance  wouldn't  mean  a  draining  of  the  country 
of  goods,  and  not  a  creation  of  a  right  to  draw  at 
all.  For  a  right  to  draw  means,  when  exercised, 


CREDITS    AND   ACCOUNTING.  221 

that  commodities  will  be  imported  to  offset  the 
exports. 

Did  you  never  consider,  Doctor,  that  there  is 
something  very  significant  in  the  fact  that  al- 
though we  have  had  a  heavy  export  balance  all 
these  years — something  like  6,000  millions,  I 
think  it  has  run  up  to — yet  New  York  "drafts  upon 
London  are  almost  continuously  dear?  Why,  if 
we  had  a  right  to  draw  against  that  huge  export 
balance — that  "favorable  balance"  as  some  of  our 
deluded  friends  used  to  call  it, — yes,  and  you 
among  them, — drafts  upon  London  wouldn't  be 
dear.  They  would  be  so  plentiful  that  they  would 
be  a  drug  in  the  market. 

How  do  I  explain  it  ?  Well,  it  is  partly  explain- 
ed by  the  fact  that  our  export  balance  includes 
gifts  by  foreigners  to  friends  at  home,  travelers' 
expenses  abroad,  freights  earned  by  foreign  ships, 
interest  on  debts  public  and  private  created  long 
ago,  dividends,  and  rentals  for  American  land 
owned  by  foreigners;  and  partly  by  erroneous 
valuations,  as  when  our  manufacturers  ship  goods 
at  the  price  they  charge  us  and  settle  with  the 
foreigner  at  a  heavy  discount. 

The  mechanism  of  social  service,  business  as  we 
call  it,  is  little  understood,  simple  as  it  is,  outside 
of  business  circles.  Even  there  its  principles  are 
little  considered  with  reference  to  their  social  serv- 
ice relations.  But  you  see,  don't  you,  Doctor  ?  that 
the  whole  matter  will  sum  up  in  the  simple  state- 
ment that  in  the  last  analysis,  legitimate  business 
is  barter  in  the  social  service  market.  It  results 
in  normal  circumstances,  in  the  distribution  of  so- 
cial service  fairly  between  the  people  who  serve, 
and  leaves  those  who  do  not  serve  to  be  cared  for 
fraternally  if  they  are  unfortunate,  and  to  suffer 
the  natural  penalty  if  they  are  unsocial.  It  is  a 
practical  expression  of  the  Pauline  law,  that  "he 
who  will  not  work  neither  shall  he  eat."  If  it  doea 


222  SOCIAL    SERVICE. 

not  come  out  in  this  way,  if  many  who  will  not  and 
do  not  work  nevertheless  live  upon  the  fat  of  the 
land,  while  armies  of  those  who  will  work  and  do 
work  faithfully  and  serviceably,  are  continually 
in  want,  this  is  because  the  mechanism  is  out  of 
order.  I  want  to  talk  with  you  a  little  about  that 
when  we  meet  again.  For  neither  you  nor  I,  Doc- 
tor, can  escape  responsibility  for  any  serious  de- 
rangement of  the  mechanism  of  social  service. 


CHAPTER  XI. 

Derangements  of  the  Mechanism  of  Social  Service. 

In  our  talks,  Doctor,  since  that  day  at  Joseph's 
restaurant  when  a  chance  remark  about  our  dinner 
led  us  on  to  a  serious  inquiry  into  the  complex 
phenomena  which  had  produced  the  dinner  for  us 
just  when  we  wanted  it  and  where  it  was  most 
convenient  to  sit  down  to  it — in  our  talks  since 
then  upon  the  subject  of  social  service  we  have 
had  frequent  occasion  to  allude  to  its  pathology. 
But  now  that  we  come  to  consider  maladjustments 
of  the  social  service  mechanism,  I  am  really 
not  quite  sure  that  pathology  is  the  fitting  word. 
Is  there  a  pathology  of  mechanism,  I  wonder,  or 
had  we  better  use  another  term  ?  I  guess  you  are 
right ;  the  word  doesn't  make  any  difference.  But 
may  be  we  can  avoid  hypercriticism  by  saying  "de- 
rangement" in  this  particular  connection. 

That  there  are  derangements  in  the  mechanism 
of  social  service  is  evident  to  most  of  us  at  inter- 
vals and  to  some  of  us  constantly.  When  men  and 
women  who  work  hard  all  their  lives  at  useful 
service  to  others  in  the  mechanism  of  social  service 
get  very  little  service  from  others  in  return,  some- 
thing must  be  out  of  order  with  the  mechanism ; 
for  it  has  no  other  normal  function  than  to  fa- 
cilitate exchanges  of  service  for  service.  How  can 
any  one  doubt  the  derangement  when  there  is  slack 
demand  for  social  service  of  any  kind  in  a  world 
which  hungers  and  thirsts  for  social  service  of  all 
kinds?  And  isn't  it  a  fact  that  the  keener  this 
hunger  and  the  more  raging  this  thirst  for  social 
service,  the  slacker  the  opportunities  relatively  for 


224  SOCIAL    SERVICE. 

rendering  it?  What  an  absurd  condition !  Isn't  it 
true,  too,  that  those  who  beg  for  opportunities  to 
render  social  service  which  others  want,  suffer  for 
lack  of  social  service;  and  that  men  and  women 
who  render  little  or  no  service  to  anybody  through 
all  their  lives,  are  nevertheless  served  abundantly  ? 
You  know,  Doctor,  that  these  absurd  contrasts  are 
common;  and  surely  such  conditions  prove  de- 
rangement in  the  social  service  mechanism.  While 
it  may  be  natural  for  parasites  to  get  sustenance, 
it  isn't  natural  for  their  victims  to  furnish  it  vol- 
untarily. Why,  if  old  Farmer  Doe's  fanning  ma- 
chine had  got  to  scattering  the  wheat  to  the  winds 
and  pouring  the  chaff  into  bags  for  the  flouring 
mill,  both  you  and  I,  boys  as  we  were,  would  have 
known  that  it  was  out  of  order.  But  a  fanning  ma- 
chine that  gives  the  wheat  to  the  winds  and  the 
chaff  to  the  miller  would  no  more  certainly  be  out 
of  order  than  is  a  social  service  mechanism  that 
automatically  enriches  idlers  and  impoverishes 
workers. 

Aye,  aye;  I  do  know  that  some  folks  think  the 
disorder  of  this  mechanism  must  be  highly  compli- 
cated, so  complicated  that  it  will  take  millions  of 
years  of  painful  evolution  to  bring  it  into  good 
running  order,  or  else  that  the  injustices  of  its 
operation  are  due  to  the  inscrutable  decrees  of 
Providence.  But  complex  evils  do  not  always  have 
complex  causes.  Nor  are  the  decrees  of  Providence 
so  very  inscrutable  if  you  look  at  them  instead  of 
away  from  them.  The  evils  of  the  Johnstown  flood 
some  twenty  years  ago  were  tremendously  complex, 
you  remember,  but  the  cause  was  as  simple  as  the 
collapse  of  a  dam  in  the  channel  of  a  running 
stream;  and  as  for  the  "inscrutable  decrees  of 
Providence"  in  that  instance,  weren't  they  as  ra- 
tional as  a  syllogism  ? 

I  shouldn't  be  surprised,  don't  you  know,  to  find 
that  our  periodical  convulsions  in  social  service  are 


DERANGEMENTS.  225 

due  to  the  same  derangements  of  the  mechanism 
which  cause  the  constant  poverty  of  the  working 
masses,  and  that  these  derangements  are  as  simple 
and  perhaps  as  easy  of  correction  as  a  gravel  in  a 
shoe.  Periods  of  hard  times  seem  to  be  acute 
phases  of  a  chronic  derangement. 

What  I  insist  upon  is  that  every  one  should  get 
an  equivalent  in  service  for  the  service  he  gives ;  if 
he  doesn't  get  that,  it  must  be  either  that  the  serv- 
ice he  offers  or  the  service  he  seeks  is  in  some  way 
diverted.  I  insist  further,  that  every  one's  service 
should  be  in  demand  as  long  as  others  want  service 
such  as  his  and  are  willing  to  give  their  own  in 
exchange ;  if  it  isn't  demanded  to  that  extent,  the 
explanation  must  be  that  the  diversion  of  service 
from  those  who  serve  has  weakened  the  power  of 
each  to  employ  the  others.  This  latter  thought 
would  seem  more  familiar,  may  be,  if  I  were  to 
say  that  slack  demand  for  service  is  due  to  a  weak- 
ening of  the  purchasing  power  of  consumers.  But 
remember  that  producers  and  consumers  are  nor- 
mally the  same  lot  of  folks.  In  the  character  of 
producer,  each  serves  others ;  and  in  return,  in  the 
character  of  consumer,  each  is  served  by  others. 
The  non-producer  who  is  a  consumer  is  either  a 
pensioner  or  an  interloper.  Don't  you  see  that 
slack  employment,  due  to  a  weakening  of  the  pur- 
chasing power  of  consumers,  proves  upon  analysis 
to  be  caused  by  a  weakening  of  the  power  of  social 
servitors  to  employ  one  another  ? 

This  weakening  of  the  powers  of  mutual  em- 
ployment is  in  its  turn,  as  I  have  already  said, 
traceable  to  some  derangement  in  the  mechanism 
of  social  service  which  diverts  social  service  from 
the  normal  exchanges  of  service  for  service  to  ab- 
normal exchanges  of  service  for  no  service.  For 
how  can  there  be  any  check  upon  the  interchange 
of  mutually  desired  services,  short  of  positive  in- 
hibition by  autocratic  might,  unless  there  is  some 


226  SOCIAL    SERVICE. 

such  diversion  of  service?  And  how  can  there  be 
such  a  diversion  of  service,  short  of  high  handed 
confiscation,  unless  the  social  service  mechanism  is 
deranged  ?  That  some  such  derangement,  creating 
a  cumulative  "rake-off"  of  service  from  those  who 
serve  to  those  who  do  not,  would  produce  the  evils 
we  are  considering,  is  almost  mathematically  cer- 
tain. Sooner  or  later  a  cumulative  "rake-off" 
would  unbalance  interchanges  of  service  even  to 
the  point  of  disastrously  slowing  down  the  mechan- 
ism. Though  the  "rake-ofP  were  a  small  one,  yet 
if  it  were  constant,  and  especially  if  it  were  also 
cumulative,  it  would  be  like  Croasdale's  solitary 
bumble  bee,  which,  "being  industrious,  broke  up  a 
whole  camp  meeting/' 

It's  the  "rake-off,"  Doctor,  that  breaks  up  the 
game.  You  haven't  forgotten  your  old  poker  wis- 
dom, have  you?  Ah!  Well,  I'm  a  little  rusty  my- 
self on  that  sly  recreation  of  our  welsh-rarebit 
days ;  but  I  remember  Georgia  Pete's  "kitty"  pret- 
ty well,  and  I  reckon  you'll  remember  it  too,  con- 
fidentially at  any  rate,  when  I  remind  you  of  how 
it  broke  up  our  game.  It  seemed  inexpensive 
enough — didn't  it? — just  to  drop  one  little  chip 
into  Georgia  Pete's  "kitty"  with  every  good  win- 
ning. The  winner  didn't  mind  it,  for  his  winnings 
were  such  that  one  chip  wasn't  missed  and  he  was 
happy  enough  anyhow  to  be  generous;  the  others 
didn't  mind  it  either,  for  it  wasn't  their  chip.  But 
don't  you  recollect  now  how  that  open  mouthed 
"kitty"  drew  and  drew  until  we  got  to  saying  that 
"kitties"  and  mustard  plasters  were  synonymous 
terms  ?  At  last  we  began  to  realize,  you  know,  that 
if  we  kept  on  going  to  Georgia  Pete's  it  would  be 
only  a  question  of  time  when  the  "kitty"  would 
get  all  we  had;  and  so  Georgia  Pete's  absorbent 
"kitty"  did  for  us  what  monitory  influences  had 
failed  to  do — it  broke  up  our  poker  game.  There 
is  something  vaguely  suggestive  to  me  about  that 


DERANGEMENTS.  227 

clandestine  experience.  It  "sort-o' "  hints  at  the 
destructive  power  of  the  "rake-off"  in  social  serv- 
ice. A  steady  diversion,  from  service  for  service 
to  service  for  no  service,  must  tend  to  bring  the 
social  service  mechanism  to  a  standstill. 

As  interchanges  of  service  for  service  slow  down, 
in  consequence  of  the  diversion  of  service,  from 
exchanges  of  service  for  service  to  exchanges  of 
service  for  monopoly,  the  phenomena  of  poverty 
among  the  workers  in  contrast  with  wealth  among 
the  luckier  idlers,  become  more  and  more  pro- 
nounced. You  have  observed  it,  haven't  you  ?  At 
first  there  is  a  little  pressure,  impoverishing  only 
to  individuals  here  and  there  who  happen  to  be 
nearest  to  the  point  of  contact.  Then  there  is  an 
extension  of  the  pressure  over  a  wider  field,  caus- 
ing more  individual  impoverishment  with  greater 
intensity.  And  so  on,  until  the  field  of  friction 
becomes  so  wide  and  the  jarring  and  grinding  so 
general  that  the  impoverishment  which  has  been 
attributed  to  individual  inefficiency  or  misfortune 
takes  on  the  aspects  of  business  stagnation.  How 
well  I  remember,  away  back  in  the  '70's,  how  the 
folks  out  our  way  kept  on  blaming  little  Jimmie 
Buckley  for  "failing  up"  in  '72.  But  along  in  '75 
'Squire  Hamilton  "failed  up,"  too,  and  then  they 
pitied  the  'Squire  as  a  victim  of  hard  times.  So 
long  as  it  was  only  little  Jimmie,  he  failed  from 
his  own  fault,  you  know ;  but  when  the  old  'Squire 
went  to  the  wall,  hard  times  had  crippled  him. 
Haven't  you  ever  noticed,  Doctor,  that  with  the 
great  working  mass  it  is  hard  times  all  the  time, 
sometimes  better  and  sometimes  worse,  but  always 
bad,  while  hard  times  come  to  the  "rake-off  bunch" 
only  periodically?  But,  bless  you,  how  that 
"bunch"  does  groan  when  the  periodical  hits 
them! 

The  truth  is,  you  see,  that  ordinary  poverty  is 
due  to  the  difficulty  among  the  masses  of  the 


228  SOCIAL    SERVICE. 

people  of  bringing  about  a  swap  of  the  services 
they  are  able  to  give  for  the  services  they  want.  As 
this  difficulty  expands  and  intensifies,  the  inter- 
laced circles  of  trade  are  disrupted,  and  then  we 
all  realize  what  the  working  masses  constantly  feel, 
the  monumental  absurdity  of  a  social  service  mar- 
ket in  which,  while  nearly  everybody  wants  to 
trade  service  for  service,  trading  in  service  for 
service  is  stagnant. 

What  kind  of  derangement  of  the  mechanism 
of  social  service  can  that  derangement  be,  do  you 
suppose,  which  runs  with  so  much  friction  ? 

Scarcity  of  money  ?  Why,  money  is  only  a  me- 
dium of  trade,  a  token,  chips  in  the  game.  The 
thing  traded  is  really  not  money  but  services,  and 
services  can  be  traded  without  money.  How,  then, 
can  money  be  important  fundamentally?  By  far 
the  greater  proportion  of  all  transactions  in  the 
social  service  market  are  completed  without  money, 
as  you  will  realize  if  you  recall  our  clearing  house 
talk ;  and  the  more  the  clearing  house  principle  is 
improved  the  less  money  we  need,  swap  for  swap. 
With  a  perfect  system  of  communal  book-keeping, 
such  as  a  perfect  clearing  house  system  would  af- 
ford, we  should  need  no  money  at  all.  But  do  you 
suppose  that  the  great  derangement  of  the  social 
service  mechanism  would  adjust  itself  if  there  were 
no  need  for  money,  or  if  the  money  system  were 
perfect  ?  Do  you  suppose  that  then  we  should  have 
service  for  service  ?  No  ?  Of  course  you  don't.  We 
all  know  quite  well  that  if  chattel  slavery  were  re- 
established, a  perfect  money  system  would  make 
no  difference  to  the  slave.  He  wouldn't  get  serv- 
ice for  service ;  slavery  would  give  his  share  of  so- 
cial service  over  and  above  "his  keep"  to  his  mas- 
ter as  a  "rake-off."  And  don't  you  think  that  there 
are  law-made  ways  of  commanding  this  rake-off 
from  servitors  without  owning  their  bodies?  ways 
with  which  money  has  no  more  to  do  than  chips 


DERANGEMENTS.  229 

had  to  do  with  our  old  poker  game?  ways  in  con- 
nection with  which,  as  with  slavery,  money  only 
measures  and  keeps  account  of  the  rake-off  ? 

Yes,  tax  obstructions  to  trade  have  that  effect. 
But  taxation  is  only  one  mode  of  obstructing 
trade.  Bad  money  systems  are  another  and  rail- 
road discriminations  another.  All  these  are  essen- 
tially free  trade  questions.  But  if  we  had  the 
most  complete  freedom  of  trade,  short  of  freedom 
of  production,  we  might,  and  I  am  confident  we 
should,  nevertheless  suffer  precisely  as  we  do  now. 
Our  social  service  market  would  be  in  as  great  dis- 
order. For  in  logical  sequence  production  neces- 
sarily precedes  trade,  and  if  there  is  any  disorder 
in  the  relation  of  the  social  service  mechanism  to 
production,  the  removal  of  trade  disorders 
wouldn't  be  enough.  It  is  only  in  case  the  malad- 
justment is  wholly  with  reference  to  trade  as  dis- 
tinguished from  production,  that  a  perfect  adjust- 
ment as  to  trade  would  restore  the  social  service 
mechanism.  But  we  have  only  to  reflect  a  little, 
Doctor,  to  realize  that  the  maladjustment  of  the 
social  service  mechanism  is  not  confined  to  its  trad- 
ing as  distinguished  from  its  producing  functions. 
The  probability  is  that  the  disorders  of  produc- 
tion are  such  that  if  all  other  disorders  were  cor- 
rected these  corrections  would  only  intensify  the 
disorders  from  production. 

Consider,  Doctor,  that  without  production  there 
can  be  no  trade  but  the  most  primitive.  I  might 
render  you  some  slight  personal  service  without 
producing  anything  for  you ;  and  you  might  repay 
with  some  slight  personal  service  without  produc- 
ing anything  for  me.  But  this  could  go  only  a  lit- 
tle way.  If  trading  were  confined  to  direct  per- 
sonal services  there  could  be  no  civilized  life.  Even 
the  services  that  we  call  personal  in  civilized  life, 
such  as  those  of  the  barber,  the  physician,  the  ac- 
tor, the  lawyer,  and  so  on,  can  be  performed,  as 


230  SOCIAL     SERVICE. 

they  are  performed,  only  because  there  is  produc- 
tion. When  the  barber  cuts  your  hair  or  shaves 
your  face,  he  utilizes  tremendous  productive  power 
in  the  implements  and  processes  and  sources  of 
supply  of  the  machines  that  have  enabled  his  co- 
operators  in  shaving  you  or  cutting  your  hair,  to 
turn  out  the  simple  tools  of  his  trade.  The  pro- 
duction of  goods,  of  machinery,  of  buildings — in  a 
word,  the  production  of  commodities — is  abso- 
lutely essential  to  the  exchange  of  service  for  ser- 
vice in  civilized  life;  and  production  necessitates 
implements,  or,  speaking  more  generally,  instru- 
ments. 

Am  I  alluding  to  the  instruments  of  production 
and  distribution  that  our  socialistic  neighbor  down 
the  street  speaks  of  so  often?  To  be  sure  I  am. 
Would  I  have  you  suppose,  then,  that  the  funda- 
mental derangements  of  the  mechanism  of  social 
service  are  to  be  found  in  connection  with  the  in- 
struments of  production  and  distribution?  That 
is  what  I  would  have  you  understand,  Doctor. 
And  that  the  blight  of  poverty  and  the  recurrence 
of  periods  of  hard  times,  the  diversion  of  service 
from  the  channels  of  service  for  service  to  those 
of  service  for  no  service,  are  finally  traceable  to  in- 
equalities of  opportunity  with  reference  to  those  in- 
struments ?  Quite  so.  It  is  my  conviction,  Doctor, 
that  the  trouble  lies  exactly  there.  If  we  can  ad- 
just the  mechanism  of  social  service  at  that  pri- 
mary point,  we  shall  be  able  with  the  greatest  ease 
to  make  the  secondary  corrections.  Most  of  them 
— all  the  related  ones,  I  should  say — would  then 
correct  themselves. 

Since  the  interchanges  of  social  service  necessi- 
tate great  stocks  and  constant  reproductions  of 
commodities,  as  I  think  any  one  can  see,  and  this 
necessitates  instruments  of  production  and  dis- 
tribution vast  in  amount  and  unfailing  in  supply, 
doesn't  he  who  controls  those  instruments,  whether 


DERANGEMENTS.  231 

he  be  an  individual  or  a  class,  doesn't  he  control 
both  product  and  producer  ?  Eight  there,  Doctor, 
is  the  primary  point  for  inspection  if  we  think  of 
the  social  service  market  as  a  mechanism,  and  for 
diagnosis  if  we  think  of  it  as  an  organism. 

There  are  two  great  instruments  of  production, 
you  will  observe.  I  say  instruments  of  production, 
without  mentioning  distribution,  for  distribution 
in  the  sense  in  which  we  are  here  using  the  word 
means  delivery,  and  as  you  remember  delivery  is 
a  part  of  the  process  of  production.  And  of  course 
I  am  speaking  of  categories  of  instruments,  and 
not  of  individual  items,  whether  little  or  big. 
When  we  get  down  to  bed  rock  in  our  analysis,  I 
think  we  shall  find  that  one  category  comprises 
the  artificial  instruments  of  production,  those  that 
are  produced  by  human  art;  and  that  the  other — 
there  are  but  two,  mind  you — comprises  the  nat- 
ural instruments  of  production,  those  that  are 
not  produced  by  human  art  but  are  freely  sup- 
plied by  nature.  No,  no;  of  course  I  don't  in- 
clude a  man's  hands  among  the  natural  instru- 
ments of  production — of  course  not ;  and  well  you 
may  laugh  at  the  thought.  A  man's  hands  are  part 
of  the  man;  and  we  are  talking  about  the  rela- 
tion of  the  man  to  his  environment,  not  about  the 
relation  of  one  part  of  him  to  another.  It  is  the  in- 
struments of  production  his  body  uses  that  we  are 
considering,  and  the  point  I  wish  to  impress  upon 
you  is  the  obvious  fact  that  some  of  these  instru- 
ments are  artificial  and  the  others  natural. 

Opportunities  instead  of  instruments?  Yes,  if 
you  wish.  We  could  just  as  well  say  that  there  are 
two  kinds  of  opportunity  for  civilized  production, 
and  therefore  for  social  service,  and  that  these  are 
artificial  opportunities  and  natural  opportunities. 
But  don't  go  off  with  the  notion  that  they  can  be 
utilized  independently.  They  must  be  used  to- 
gether. There  is  no  alternative.  Natural  oppor- 


232  SOCIAL,    SERVICE. 

tunities  or  instruments,  without  the  artificial,  may 
serve  the  primitive  life  but  not  the  civilized;  and 
the  artificial  without  the  natural  are  unthinkable 
under  any  circumstances.  Social  service,  let  me 
admonish  you,  is  a  phenomenon  of  the  co-operative 
utilization  of  artificial  and  natural  opportunities 
or  instruments  of  production.  To  the  extent  then 
that  access  to  either  class  of  instruments  is  ob- 
structed, to  that  extent  the  social  service  mechan- 
ism is  fundamentally  deranged ;  to  that  extent  the 
circles  of  trade  are  thrown  out  of  gear;  to  that 
extent  the  grim  absurdity  of  supply  of  service 
vainly  seeking  demand  for  service  in  a  social  serv- 
ice market  which  exists  for  the  exchange  of  service 
for  service,  and  at  times  when  suffering  is  intense 
for  need  of  the  very  service  which  vainly  offers,  is 
increased  in  its  dimensions  and  magnified  in  its 
grim  absurdity;  to  that  extent  our  nature-defying 
contrasts  of  idle  rich  and  industrious  poor  are 
sharply  defined  and  made  elements  of  social 
danger. 

That  access  to  both  is  obstructed,  we  shall  agree, 
I  think,  if  we  discuss  access  to  the  instruments 
or  opportunities  for  production,  artificial  and  nat- 
ural, as  the  fundamental  requisite  of  social  service. 


CHAPTER  XH. 

Analysis  of  the  Instruments  of  Social  Service. 

The  last  time  we  talked  about  social  service, 
Doctor,  we  made  a  brief  analysis,  you  will  re- 
member, of  the  instruments  of  production 
and  distribution.  We  spoke  of  them,  how- 
ever, as  instruments  of  production, — of  pro- 
duction only.  For  we  agreed  that  distribution,  as 
we  were  using  the  word,  means  delivery;  and  de- 
livery, you  know,  is  one  of  the  productive  proc- 
esses. The  boy  who  brings  you  a  newspaper,  isn't 
he  producing  newspapers  as  truly  as  is  the  editor 
or  the  printer? 

Yes,  the  word  "distribution"  may  be  used  in 
contradistinction  to  "production";  but  then  it 
refers  not  to  delivery  of  products,  but  to  division 
of  profits.  The  members  and  employes  of  a  busi- 
ness firm,  for  instance,  are  engaged  in  production, 
not  only  as  they  shape  objects  for  sale  but  also  as 
they  sell  and  deliver  them.  They  are  engaged  in 
production  though  they  do  nothing  but  sell  and 
deliver.  Storekeepers  are  producers  as  truly  as 
farmers  and  mechanics.  But  in  the  special  sense 
of  the  word  "distribution"  to  which  you  allude, 
employers  and  their  employes  are  engaged  in  dis- 
tribution only  as  they  divide  among  themselves 
the  profits  of  their  shaping  and  selling  and  de- 
livering,— such  a  share  for  the  wages  of  this  man, 
such  a  share  for  the  wages  of  that  man,  such  a 
share  for  the  work  of  this  member  of  the  firm, 
such  a  share  for  the  work  of  that  member,  such 
and  such  shares  pro  rata  for  those  who  furnish 


234  SOCIAL    SERVICE. 

the  artificial  instruments,  and  such  a  share  for 
those  who  furnish  the  land. 

The  customs  of  old  whaling  voyages  afford  an 
extra  good  illustration;  for  on  those  voyages  the 
profits  were  divided  by  shares,  according  to  the 
"catch,"  somewhat  as  we  divided  those  fish  at 
Green's  Pond  when  you  and  I  were  boys.  So  we 
may  say — don't  you  see? — that  whaling  crews 
were  engaged  in  producing  oil  when  they  har- 
pooned whales,  and  when  they  extracted  the  oil, 
and  also  when  they  transported  the  oil  in  their 
vessels  to  the  point  of  delivery ;  and  that  distribu- 
tion among  them  took  place  when  their  respective 
shares  of  oil  were  estimated  and  assigned  at  the 
end  of  a  voyage.  Consider  the  analogy,  Doctor, 
and  you  will  see  that  our  old  Professor  Eutley  was 
right — and  yet  without  my  being  wrong, — when 
he  distinguished  in  the  way  he  did  between  "pro- 
duction" and  "distribution."  For  what  he  meant 
by  distribution  wasn't  delivery ;  it  was  calculation, 
assignment,  or  division  of  shares — among  the 
workers  in  wages,  the  capitalists  in  interest,  the 
land  owners  in  rent,  and  so  on.  I  say  "and  so  on" 
because  he  used  to  have  several  other  shares. 

Let  me  see,  there  was  "insurance"  for  one  of 
them.  But  I  never  could  understand  how  insur- 
ance could  be  a  distinct  share  in  distribution. 
What  he  meant  by  insurance  was  a  sort  of  general 
evening  up,  the  high  profits  of  lucky  ventures  and 
the  low  profits  or  the  losses  of  unlucky  ones  mak- 
ing an  average  when  production  as  a  whole  was 
considered.  You  may  call  this  "insurance"  if  you 
wish  to,  but  all  the  same  I  don't  see  how  the  so- 
cial service  system  as  a  whole  can  insure  itself 
any  more  than  you  can  propel  your  sailboat  with 
a  blacksmith's  bellows  in  the  stern.  Particular 
workers  may  insure  by  selling  out  in  advance  to 
a  speculator,  who  takes  the  risks.  But  insurance 
against  risks  in  production  is  no  more  an  element 


INSTRUMENTS.  235 

in  distribution  than  insurance  against  fire  risks. 
In  a  fire  risk  the  owner  of  the  house  either  car- 
ries the  risk  himself  or  hires  some  one  else  to.  In 
the  risks  of  production,  producers  either  carry  the 
risks  themselves,  making  for  themselves  the  larger 
wages  of  good  seasons,  and  bearing  with  lower 
wages  if  the  season  is  poor;  or  else  they  hire 
speculators  to  guarantee  them  against  low  wages 
from  possible  bad  luck  by  letting  the  speculators 
have  the  extra  high  wages  from  possible  good 
luck.  The  insurance  to  which  Professor  Eutley 
referred  was  really  nothing  but  wages.  You 
can't  make  any  other  category  for  it.  Producers 
as  a  whole  cannot  insure  themselves  as  a  whole. 
The  aggregate  of  production  cannot  be  made  any 
greater  in  seasons  of  bad  luck,  nor  any  less  in 
seasons  of  good  luck,  by  means  of  insurance.  In- 
surance can  readjust  or  equalize  individual 
shares;  but  the  total  fund  distributed  is  neither 
more  nor  less,  either  in  value  measurements  or  in 
utility  measurements,  on  account  of  insurance. 

There  was  also  "wages  of  superintendence,"  in 
our  old  college  days,  you  will  remember.  Profes- 
sor Rutley  dwelt  on  this  as  a  knock-down  argu- 
ment against  those  "com-raew-nists"  that  grand- 
father used  to  rail  at  in  his  good  natured  way, 
without  knowing  much  of  anything  about  them 
except  that  they  were  trying  to  make  strange 
rules  for  a  business  game  in  which  he  played  in 
a  modest  way.  But  isn't  superintendence  work? 
Well,  then  the  wages  of  superintendence  must  be 
wages  for  work.  So  why  classify  the  "wages  of 
superintendence,"  except  as  a  sub-classification, 
unless  it  be  to  confuse?  Of  course  Professor  Rut- 
ley  didn't  mean  to  confuse.  He  was  the  soul  of 
honor.  But  he  was  also  a  very  type  of  guileless 
simplicity.  He  was  himself  confused  by  his  au- 
thorities. The  words  "superintendence"  and 
"wages  of  superintendence,"  so  evidently  indicat- 


236  SOCIAL    SERVICE. 

ing  mere  phases  of  labor  phenomena,  confused 
him,  just  as  some  of  our  rich  business  friends 
hereabouts  are  confused  by  the  word  "ability/' 
which  the  agile  Mr.  Mallock  has  supplied  them 
with.  The  share  of  production  which  they  claim 
for  "ability,"  is  Professor  Eutley's  old  "wages  of 
superintendence"  in  a  new  guise.  Our  rich  busi- 
ness friends  around  here  thank  Mallock  for  his 
hint,  for  it  enables  them  to  attribute  their  greater 
wealth  to  their  greater  "ability."  They  want  to 
distinguish  themselves  from  workers  who  are  not 
rich,  by  implying  that  while  they  themselves  have 
"ability,"  the  mere  workers  lack  "ability."  And 
indeed  the  latter  do  lack  the  ability  to  get  rich. 
If  they  didn't,  they'd  be  rich.  But  the  truth  is, 
Doctor,  between  you  and  me  and  the  lamppost, 
that  if  our  complacent  friends  are  not  rich  from 
ability  to  work,  then  they  are  rich  from  ability  to 
plunder.  You  ^understand  what  I  mean.  If 
their  "ability"  isn't  productive,  like  the  ability  of 
the  foreman  who  causes  his  subordinates  to  co- 
operate effectively,  then  it  is  furacious,  like  the 
ability  of  the  burglar,  the  forger,  or  the  bunco 
man.  If  they  are  not  laborers  they  are  parasites ; 
and  even  if  parasites  are  not  parsnips,  fine  words 
won't  butter  them. 

When  men  boast  in  this  way  of  the  faculty 
which  they  call  "ability,"  they  ought  to  explain 
what  kind  of  ability  they  mean.  They  want  us  to 
understand,  of  course,  that  the  "ability"  they 
mean  is  ability  to  increase  the  aggregate  of  wealth. 
Now,  that  kind  of  ability  is  fine,  provided  it  is 
used  for  that  purpose.  But  that  kind  of  ability 
when  used  for  that  purpose  is  labor,  nothing  but 
labor;  and  its  compensation,  no  matter  how  large, 
up  to  the  point  of  its  productiveness,  is  wages, 
nothing  but  wages.  If,  however,  the  "ability"  be 
merely  unused  ability  to  labor,  or  if  it  be  ability 
to  appropriate  without  productive  labor  any  of 


INSTRUMENTS  237 

the  products  that  others  produce  by  their  labor, 
then  the  boasted  "ability"  of  our  over-wealthy 
friends  is  something  to  be  ashamed  of.  They  arc 
in  that  case  living  upon  the  labor  of  others,  as 
truly  as  ever  a  slave-owning  cotton  planter  was. 
If  they  are  doing  that,  they  are  not  paying  their 
way  in  the  world. 

Another  of  Professor  Eutley's  superfluous  cate- 
gories of  distribution  was  "profits."  But  what 
are  profits  but  the  total  increase  out  of  which  all 
shares  are  carved?  You  and  I  have  talked  this 
over  before,  and  we  won't  say  much  more  about  it. 
But  to  regard  profits  as  a  distributive  share  of 
production  is  like  dividing  a  mince  pie  into 
mince-meat,  crust,  and  pie,  or  into  two  halves  and 
the  whole. 

The  undertaker  ?  Ah,  yes ;  I  see.  You  mean 
the  "entrepreneur"  fellow  about  whom  that  uni- 
versity extension  lecturer  told  us  last  winter. 
Why  the  entrepreneur  is  a  speculator  who  gam- 
bles on  the  success  of  productive  enterprises,  win- 
ning largely  if  they  succeed  and  losing  largely  if 
they  fail.  Well,  haven't  we  already  considered 
him?  In  so  far  as  he  is  a  mere  gambler,  he 
doesn't  count  any  more  than  any  other  gambler. 
In  so  far  as  he  is  a  co-operator  in  production,  his 
share  is  wages — if  not  of  his  own  direct  produc- 
tion, then  of  the  production  of  others  who  have  sold 
out  to  him  in  advance.  He  gets  high  wages  on 
doubtful  enterprises  that  succeed,  in  consideration 
of  taking  none  or  less  than  none  if  they  fail. 

Let's  get  back  now  to  our  whale-ship  illustra- 
tion. The  greater  value  of  that  ship  coming 
home  laden  with  whale  oil,  over  its  value  when  it 
left  home  to  catch  whales,  is  the  profit  of  the 
voyage ;  and  this  profit  is  to  be  distributed,  that  is, 
divided,  among  the  voyagers  and  their  backers.  So 
with  the  social  service  market.  Its  increased  vol- 
ume of  products  at  any  time  is  profit  to  be  dis- 


238  SOCIAL    SERVICE. 

tributed  or  divided;  according  to  service  if  under 
just  conditions,  according  to  powers  of  mere  ap- 
propriation if  under  unjust  conditions.  To  say 
that  some  of  these  products  go  to  some  of  the  in- 
habitants of  the  earth  as  "profit,"  is  to  tumble 
into  verbal  confusion.  To  say  that  some  of  these 
products  go  to  some  of  the  inhabitants  of  the 
earth  for  "ability"  or  in  "wages  of  superintend- 
ence," is  merely  to  make  a  sub-classification,  or 
else  to  "duck"  or  dodge.  To  say  that  some  of 
these  products  go  to  some  of  the  inhabitants  of 
the  earth  in  "insurance,"  is  merely  saying  that 
some  of  them  go  to  folks  who  speculate  in  social 
service  uncertainties.  But  to  say  that  some  of 
these  products  go  in  earnings  to  some  inhabitants 
of  the  earth  as  workers,  and  that  some  go  to 
others  as  beneficiaries  of  special  privileges  main- 
tained by  sovereign  power,  is  a  clear  differentia- 
tion of  a  practical  and  fundamental  difference. 

And  not  only  is  this  difference  practical  and 
fundamental,  Doctor,  but  there  is  one  part  of  the 
special  privilege  share  of  production  which  cannot 
go  to  the  workers.  This  is  the  part  or  share  that 
Professor  Eutley  called  "rent,"  when  he  used  to 
lecture  us  on  Eicardo's  famous  law.  Of  course 
workers  might  get  it,  but  not  as  workers ;  it  would 
be  as  land  owners. 

For  illustration,  there  is  old  Farmer  Doe.  He 
owns  his  farm,  and  if  he  gets  20  tons  of  hay  off 
it,  all  that  hay  is  his.  So  you  may  say,  if  you 
like,  that  he  gets  the  full  product  of  his  labor  in 
this  respect.  But  what  of  Farmer  Eoe?  He  also 
gets  20  tons  of  hay  with  about  the  same  work; 
but  he  has  to  give  six  tons  or  more  to  Slim  Jim 
Pulsifer,  who  owns  the  farm;  and  most  of  that 
six  tons  or  more  is  for  ground  rent,  for  Slim 
Jim's  improvements  don't  amount  to  much.  Now 
the  sovereign  power  of  the  state  compels  Eoe  to 
do  that,  for  it  gives  Slim  Jim  the  absolute  mon- 


INSTRUMENTS.  239 

opoly  of  the  spot  of  earth,  that  Mr.  Eoe  farms. 
No  one  can  use  this  spot  without  paying  Slim 
Jim  for  the  privilege.  The  'laws  of  the  land" 
say  so. 

But  you  couldn't  change  the  general  principle 
of  that  division  even  if  you  changed  the  laws  and 
allowed  Eoe  to  keep  all  his  hay  just  as  Doe  does. 
Differences  in  location  would  still  give  advantages 
of  location,  which  would  provide  a  "rake  off" ;  and 
even  if  these  "rake  offs"  were  disguised  by  mix- 
ing them  up  with  wages  as  part  of  the  income  of 
working  men,  or  with  "profits"  as  part  of  the  in- 
come of  investors  in  production,  or  of  "entrepre- 
neurs," or  of  superintendents,  they  would  nev- 
ertheless be  "rake  offs"  all  the  same.  You 
can  see  this,  Doctor,  by  contrasting  Roe 
and  Doe  with  Peter  Curry  over  on  the  side 
hill  farm.  Curry  owns  his  farm  just  as  Doe  owns 
his ;  so  he  gets  all  the  hay  he  makes,  just  as  Doe 
does.  And  Curry  works  as  hard  at  making  hay  as 
either  Doe  or  Roe.  But  where  they  get  20  tons, 
he'll  only  get  12  or  13,  for  the  bottoms  of  that 
side  hill  farm  are  not  as  good  for  hay  as  those  of 
the  other  farms.  They  "won't  more  than  pay 
wages,"  as  grandfather  used  to  say.  Don't  you 
see,  then,  that  Doe  and  Roe  would  get  more  hay 
than  Peter  Curry,  though  they  all  worked  alike, 
even  if  the  laws  were  to  step  in  and  put  a  stop  to 
Slim  Jim's  absentee  landlordism?  They  would 
get  more  because  some  of  their  hay  would  be  for 
ground  rent  or  location  advantage,  and  Peter's 
wouldn't.  They  would  be  getting  something  for 
a  location  on  the  planet,  while  Peter  Curry  would 
be  getting  nothing  but  wages  for  work. 

Now,  Doctor,  there  is  no  way,  I  repeat,  of  pre- 
venting this  classification  of  products  into  a  rent 
fund  and  a  wages  fund, — not  so  long  as  we  allow 
land  to  be  privately  possessed.  Nothing  short  of 
land  communism  would  stop  it.  And  I  for  one 


240  SOCIAL    SERVICE. 

don't  believe  in  land  communism.  I  think  it  is 
a  back  number.  Our  present  system  of  individual 
occupancy  is  essentially  a  good  one, — the  best  we 
have  ever  had.  It  is  its  abuse,  not  the  thing  itself 
that  is  bad.  But  you  must  understand  that  with 
individual  occupancy  of  land,  some  spots  on  the 
planet  being  more  desirable  than  others,  the  oc- 
cupants of  those  spots  will  have  an  advantage. 
Premiums  inevitably  result  from  private  occupancy 
of  specially  desirable  locations.  Consequently,  un- 
der private  occupancy  we  have  two  natural  shares 
or  funds  of  labor  products  for  distribution.  One 
fund  represents  the  aggregate  product  up  to  the 
point  at  which  there  is  no  advantage  of  location — 
up  to  the  Peter  Curry  point  in  hay  making,  let  us 
say.  The  other  fund  is  the  remainder  of  the 
aggregate  product — the  excess  on  the  Doe  and  Roe 
farms,  let  us  say,  in  comparison  with  Peter  Curry's. 
The  former  fund  may  be  conveniently  distin- 
guished as  "wages"  and  the  latter  as  "rent."  To 
make  this  distinction  is  to  recognize  a  definite  nat- 
ural law  of  division  or  distribution.  It  furnishes 
the  fundamental  classification.  All  other  classi- 
fications are  at  the  best  only  secondary.  But  these 
two,  comprising  the  entire  product  to  be  dis- 
tributed, point  to  a  great  social  service  fact,  to 
the  fact  that  if  there  are  working  interests  and 
landed  interests  in  a  community,  each  will  be 
compelled  to  yield  to  the  other  a  share  of  the  gen- 
eral profit.  What  proportions  those  shares  will  be, 
will  depend  of  course  upon  the  equilibrium  of 
power  in  distribution. 

Some  say  that  at  least  one  of  Professor  Rut- 
ley's  other  shares  in  distribution  has  a  place — 
the  share,  that  is,  for  those  who  own  artificial 
instruments.  You  remember  that  the  old  pro- 
fessor called  these  instruments  "capital"  and 
their  share  "interest."  My  own  view  of  that  mat- 
ter is  that  artificial  instruments  fall  really  into 


INSTRUMENTS.  241 

the  category  of  work  or  labor — for  they  are  pro- 
duced, maintained  and  constantly  reproduced  by 
labor, — and  therefore  that  "interest"  is  only  a  sec- 
ondary classification  and  falls  into  the  primary 
category  of  wages.  It  seems  to  me  that  if  workers 
were  not  "fleeced/'  as  our  socialistic  friend  rudely 
proclaims  that  they  are,  their  acquisition  of  arti- 
ficial instruments  would  be  like  their  acquisition 
of  skill,  and  the  interest  they  got  for  the  one  would 
be  analogous  to  the  higher  wages  they  get  for  the 
other.  But  inasmuch  as  workers  are  "fleeced," 
again  to  quote  with  reluctant  approval  from  our 
indignant  friend,  and  to  an  extent  which  deprives 
large  numbers  of  them  of  all  interest  in  artificial 
instruments  of  social  service,  it  may  be  convenient 
to  divide  the  social  service  system  into  three  inter- 
ests. If  we  did  that,  we  should  have  the  working 
interest,  or  "labor"  as  Professor  Kutley  named  it; 
the  artificial-instrument  interest,  or  what  he 
meant  by  "capital";  and  the  natural-instrument 
interest,  or  "land"  as  the  technical  term  goes.  In 
accordance  with  that  classification  we  should  have 
to  distribute  profits  in  three  parts — wages  for  la- 
bor, interest  for  capital,  and  rent  for  land.  But 
in  any  fundamental  analysis,  as  I  think  you  will 
agree,  we  shall  be  confined  to  two  classifications 
instead  of  having  three.  The  artificial  instru- 
ments, aren't  they  merely  natural  materials 
shaped  by  human  art?  Very  well.  Then  in  any 
final  analysis,  artificial  shape  must  be  eliminated 
as  a  mere  temporary  expression  of  human  art; 
and  so  the  de-shaped  material  would  fall  back  into 
the  category  of  natural  instruments,  pure  and  sim- 
ple. If  you  have  workers  with  the  necessary 
knowledge  and  skill,  and  natural  instruments  and 
location  are  available,  artificial  instruments  are 
easily  produced  and  reproduced,  added  to,  multi- 
plied, improved,  and  even  geometrically  pro- 


242  SOCIAL    SERVICE. 

Not  only  may  this  be  easily  done,  but  it  is  done 
in  fact  all  the  time.  If  labor  retained  possession 
of  the  new  instruments  it  is  making  hourly  it 
would  soon  own  all  instruments  of  the  artificial 
kind.  Think,  Doctor,  of  how  little  of  the  volume 
of  artificial  instruments  that  existed  ten  years 
ago  exists  today.  Even  the  buildings  and  ma- 
chinery that  remain  are  mightily  altered  by  re- 
pairing and  keeping  up,  and  for  the  most  part  we 
have  new  buildings  and  new  machinery.  All  this 
has  been  done  in  the  interval  by  labor.  It  is  a 
serious  mistake,  Doctor,  to  suppose  that  there  is 
any  great  accumulation  of  capital  from  the  pro- 
duction of  the  past.  There  is  indeed  a  constantly 
increasing  fund  of  knowledge.  But  each  individ- 
ual has  to  make  this  his  own  by  his  own  hard 
work.  There  is  no  other  way. 

Glad  of  your  interruption.  You  are  quite  right 
in  saying  that  the  term  "artificial  instruments" 
does  not  in  verbal  strictness  comprehend  every- 
thing that  Professor  Eutley  included  in  the  term 
"capital."  He  included  money,  which  is  no  more 
capital  than  a  title  deed  is  land,  or  the  bill  of  sale 
for  your  horse  is  old  Dolly  herself.  But  I  ad- 
mit that  we  must  use  the  term  "artificial  instru- 
ments of  production"  in  a  very  broad  sense  to 
make  it  include  all  forms  of  what  is  distinctively 
capital.  We  must  use  it  so  as  to  include  artificial 
materials  as  well  as  artificial  tools.  And  we  must 
not  forget,  either,  that  all  these  things — artificial 
instruments  and  materials  and  the  natural  ones 
too — get  mixed  up  with  organization,  capitalistic 
organization,  market  opportunity,  as  you  might 
eall  it,  in  most  confusing  fashion. 

But  in  fact,  Doctor,  in  any  reasonable  analysis, 
capital  is  identical  with  unfinished  objects  of  con- 
sumption, and  both  artificial  materials  and  arti- 
ficial tools  are  such  objects.  We  have  already 
concluded  that  wheat,  to  the  extent  that  it  is  used 


INSTRUMENTS.  243 

to  make  bread,  is  unfinished  bread ;  and  that  flour- 
ing mills,  to  the  extent  that  they  produce  flour 
afterwards  made  into  bread,  are  also  unfinished 
bread.  There  you  have  the  whole  matter,  if  not 
in  a  nutshell  at  any  rate  in  a  bread  basket.  All 
production  is  for  consumption,  and  every  artificial 
thing  used  in  production  is  simply  incomplete  pro- 
duction. 

These  things,  from  first  to  last,  are  usually 
called  commodities.  This,  I  suppose,  is  because 
they  are  objects  of  trade.  Trade  consists  essen- 
tially in  the  interchange  of  commodities.  Don't 
you  remember  the  groceries  you  bought  of  the 
grocery  clerk  away  back  at  the  beginning  of  these 
talks,  and  the  food  we  have  bought  at  Joseph's 
restaurant?  All  these  were  commodities.  But  they 
do  not  exhaust  the  list  of  commodities.  Houses 
are  commodities.  So  is  the  land  they  rest  upon. 
Farm  products,  farm  improvements,  and  farm 
land  also  are  commodities.  Mines  are  commodi- 
ties— even  when  the  titles  are  divided  into  stock 
certificates,  they  are  still  commodities.  So  are 
railroad  cars  and  railroad  rights  of  way.  Air  and 
sunlight  are  commodities  when  they  can  be  bought 
and  sold,  as  in  the  case  of  a  room  with  a  sunny 
exposure,  or  a  location  where  the  air  is  especially 
refreshing.  Water  under  like  circumstances  of 
purchase  and  sale  is  also  a  commodity.  If  slavery 
prevailed,  slaves  would  be  commodities.  This  is 
enough  to  show  that  commodities  are  various  in 
essential  character.  The  only  quality  that  is  com- 
mon to  all  commodities  is  exchangeableness  and 
value. 

Now,  Doctor,  isn't  it  obvious,  in  view  of  the 
variety  of  commodities,  that  classification  is  neces- 
sary for  clearness.  Wouldn't  he  be  a  mighty  poor 
reasoner  who  allowed  himself  to  reason,  as  if  fund- 
amentally, about  such  fundamentally  different 
things  as  men,  the  planet,  houses,  groceries,  cloth- 


244  SOCIAL    SERVICE. 

ing  and  the  like,  without  distinct  classification? 
Have  to  put  men  in  a  different  category  from  the 
planet?  Of  course  he  would.  And  groceries  in  a 
different  category  from  either,  wouldn't  he?  All 
of  them  are  or  may  be  commodities ;  that  is  true 
enough.  But  some  commodities  are  natural  ob- 
jects, and  others  are  artificial  objects.  This  differ- 
ence is  vital.  For  artificial  objects  are  human  prod- 
ucts; whereas  natural  objects  are  the  ultimate 
sources  and  means  of  human  production.  The 
difference  is  as  discrete  as  that  between  a  spring 
of  water  and  a  pail  of  water  from  the  spring,  be- 
tween a  house  and  the  source  of  its  materials  or 
the  site  upon  which  it  stands,  between,  a  marble 
statue  and  a  marble  quarry. 

These  essential  differences  in  commodities  may 
be  fairly  and  completely  distinguished,  I  think, 
by  assigning  them  to  three  classes:  commodities 
that  are  final  products,  as  the  bread  you  have 
just  brought  home  from  the  baker's  in  order  to 
eat  it  at  your  table ;  commodities  that  are  artificial 
instruments  of  production,  as  the  flouring  mill 
and  the  wheat  it  grinds  and  the  flour  it  turns  out ; 
and  natural  instruments,  as  the  field  wherein  the 
wheat  is  raised,  the  site  on  which  the  mill  is 
erected,  and  the  mineral  deposits  and  the  forest 
growths  from  which  the  material  for  the  mill  and 
its  machinery  are  obtained.  But  as  the  artificial 
are  produced  from  the  natural  by  human  labor,  I 
repeat  that  in  the  last  analysis  we  have  only  two 
Bocial  service  factors,  human  energy  and  natural 
instruments;  and  two  correlative  categories  in 
the  distribution  of  products,  the  value  of  work  and 
the  value  of  planetary  opportunities  for  work. 

This  is  what  I  supposed  we  had  virtually  agreed 
to  when  we  concluded  at  our  last  conversation  that 
every  instrument  of  social  service  in  production 
belongs  in  one  or  the  other  of  those  two  classes—- 
natural instruments  or  artificial  instruments.  It 


INSTRUMENTS.  245 

is  the  latter  of  these  two  classes  that  I  wish  to  talk 
about  first.  But  it's  getting  late,  Doctor,  and 
we'll  have  to  take  up  that  subject  when  we  meet 
again. 

Before  I  go,  however,  let  me  ask  you  to  jot 
down  on  that  pad  upon  your  desk  a  little  diagram 
of  these  distinctions  for  yon  to  think  upon  be- 
tween now  and  our  meeting  again.  Put  down  these 
words  in  a  column  to  the  left  of  the  pad :  "Work- 
ingmen,"  "Managers,"  "Business  men,"  "Promot- 
ers," "Professional  men."  Yes,  "Farmers,"  if 
you  want  to;  but  they  are  really  already  named, 
for  a  farmer  is  either  a  business  man  or  a  work- 
ingman  or  both — a  farmer,  I  mean,  who  farms 
farms  instead  of  farming  farmers;  for  I  have 
known  mere  land  owners  to  call  themselves  farm- 
ers. Yes,  add  "Farmer";  it'll  do  no  harm.  Now 
what  does  your  whole  list  mean,  and  what  would  it 
mean  if  you  lengthened  it  out  with  every  kind  of 
industrial  class  you  could  think  of — what  would 
it  mean  except  that  you  have  here  a  lot  of  varie- 
ties of  "Human  Activity"  ?  Very  well ;  now  draw 
a  line  to  the  right  of  your  list  and  put  "Human 
Activity"  on  the  right  hand  side  of  it.  Lef  s  see 
your  pad.  Yes,  that's  it: 

Workingmen 

Managers 

Business  Men 

Promoters  Human  Actlvlt* 

Professional  Men 

Farmers 

Very  good.  Now  pull  off  that  page  and  write  on 
the  left  side  of  the  next  one :  "Buildings,"  "Ma- 
chinery," "Ships,"  "Railroad  equipment,"  "Cloth," 
"Lumber,"  "Pig  iron,"  "Steel  rails."  Oh,  as  many 
more  items  of  that  kind  as  you  wish;  but  those 
are  really  enough,  for  no  matter  how  long  you 
make  the  list,  you  have  still  got  nothing  there  but 
"Artificial  Instruments  of  Production."  So  draw 


246' 


SOCIAL    SERVICE. 


your  line  as  before  and  put  down  the  classifying 
words.    That's  right: 

Buildings 

Machinery 

Ships 


^Artificial  Instruments  of 
Production. 


Railroad  Equipment 

Cloth 

Lumber 

Pig  Iron 

Steel   Rails 

Once  again,  Doctor.  Take  the  next  sheet  and 
write  such  things  as  "Soil,"  "Building  sites," 
"Water  supply,"  "Oceans,"  "Eailroad  ways,"  "Sea- 
shores," "Eiver  banks,"  "Mineral  deposits." 
Won't  that  be  enough?  They  are  all  in  the  cate- 
gory of  "Natural  Instruments  of  Production,'* 
don't  you  see  ?  Yes,  add  more  if  you  want  to,  and 
let  me  see  the  result. 

Soil 

Building  Sites 

Water  Supply 

Oceans 

Railroad  Ways 

River  Banks 

Mineral  Deposits 

Sunlight 

Air 

There,  Doctor,  you  have  in  brief  the  essence  of 
all  our  talk  of  today.  Now  sum  it  up  yourself. 

Human  Activity 
Artificial  Instruments 
Natural  Instruments 


Natural   Instruments 
of  Production. 


Produce  Consumable 
Objects. 


That's  all  right  enough.  Human  activity,  utiliz- 
ing Artificial  Instruments  in  connection  with  Nat- 
ural Instruments,  produces  Consumable  Objects. 
That  is  what  you  understand,  isn't  it?  But  why 
leave  Artificial  Instruments  there  ?  They  are  neces- 
sary, of  course,  but  to  the  processes  of  labor  and  not 
as  a  condition  of  labor. 

No,    indeed,    I    do    not   forget   that   they   are 


INSTRUMENTS.  247 

monopolized.  Not  for  one  moment  do  I  forget  it. 
They  are  monopolized  for  a  fact,  and  workingmen 
are  put  at  an  enormous  disadvantage  in  conse- 
quence. So  are  business  men,  if  they  could  but 
realize  it.  No,  sirree;  I  am  not  forgetting  the 
workingman's  plight  for  lack  of  capital,  nor  the 
business  man's  troubles  about  capital.  There  are 
circumstances  in  which  artificial  instruments — 
"capital,"  "machinery,"  as  our  socialistic  friend 
calls  them;  "capital,"  "money,"  "credit,"  "cash," 
as  Slim  Jim  Pulsifer  would  say — there  are  cir- 
cumstances in  which  these  instruments  of  produc- 
tion become  supremely  important.  And  we  are 
living  in  such  circumstances  today,  Doctor. 

This  reminds  me  that  I  have  here  in  my  pocket 
a  letter  which  puts  that  point  very  lucidly.  The 
letter  is  from  our  friend  Oliver  K.  Trowbridge, 
the  author  of  "Bi-socialism,"  you  know.  Let  me 
read  a  sentence  from  it.  This  is  what  Trowbridge 
writes:  "While  production  is  fundamentally  a 
matter  of  human  activity  and  natural  instru- 
ments, yet  when  the  latter  is  withdrawn  or  with- 
held from  the  former" — when  land  is  monopo- 
lized, don't  you  see — "the  secondary  factors,  or 
artificial  instruments,  are  raised  to  a  place  of 
'practically  fundamental  importance,  inasmuch  as 
they  are  made  to  do  duty  as  a  substantial  substi- 
tute for  natural  instruments  in  the  hands  of  all 
those  who  are  dispossessed  of  the  latter."  That's 
all  true,  Doctor ;  and  so  is  Trowbridge's  additional 
comment:  "This  makes  a  monopoly  of  natural 
instruments  all  the  greater  an  evil,  since  it  tends 
directly  and  necessarily  to  create  a  corresponding 
monopoly  in  artificial  instruments."  And  now 
listen  to  this  acute  diagnosis  of  the  whole  diffi- 
culty, which  I  read  from  the  same  letter  you  see: 
"The  worship  of  the  'machine'  by  the  working- 
man,  and  of  'cash'  by  the  business  man,  is  not 
really  the  result  of  nightmare,  but  of  astigma- 


248  SOCIAL    SERVICE. 

tism;  they  simply  fail  to  see  things  from  the 
right  angle.  But  they  see  what  they  see,  all  the 
same;  and  it  is  useless  to  try  to  convince  them 
that  they  do  not."  To  that  also  I  say,  amen.  For 
I  am  not  trying  to  convince  you,  Doctor,  that 
capital  is  not  of  vital  importance.  Quite  the  con- 
trary. 

And  so,  when  I  ask  you  to  alter  the  summing  up 
of  industrial  forces,  on  your  pad,  by  striking  out 
the  item  of  Artificial  Instruments,  and  explain 
that  they  are  not  necessary  as  a  condition  of  labor, 
I  don't  want  you  to  ignore  my  further  explana- 
tion that  they  are  necessary  to  the  processes  of  la- 
bor. I  am  not  asking  you  to  ignore  the  fact  that 
monopoly  of  capital  is  a  terrible  weapon  against 
workingmen.  What  I  am  asking  you  to  do  is  to  try 
to  find  out  the  reason  why. 

In  order  to  find  out  why,  we  must  make  a  final 
analysis  of  industrial  conditions.  And  in  a  final 
analysis,  wouldn't  you  strike  out  that  item  of  Arti- 
ficial Instruments?  Wouldn't  you — merely  for 
the  purposes  of  a  final  analysis,  mind  you ;  of  mak- 
ing a  good  solid  basis  for  future  reasoning — 
wouldn't  you  for  those  purposes  leave  out  that 
item  as  representing  only  a  part  of  the  process  of 
Human  Activity,  instead  of  being  one  of  its  pri- 
mary conditions?  Since  you  would  still  have 
Human  Activity  and  Natural  Instruments,  you 
would  really  have  every  needful  condition  of  pro- 
duction. Aye,  aye;  that's  the  way  to  put  it: 

Human  Activity  )  Produce  Consumable 

Natural  Instruments      J  Objects. 

Now  you  have  the  complete  analysis,  don't  you 
see?  Human  Activity  utilizing  Natural  Instru- 
ments produces  all  Consumable  Objects,  including 
the  necessary  Artificial  Instruments. 

You  don't  think  you  could  analyze  any  farther, 
do  you  ?  Of  course  not.  You  are  now  at  the  point 


INSTRUMENTS.  249 

•f  last  analysis.  If  you  think  you  can  upset  that 
last  diagram  by  leaving  anything  out,  try  it  on 
against  our  meeting  again.  Take  my  word  for  it, 
however,  you'll  fail.  But  if  you  grasp  the  simple 
primary  truth  of  that  diagram,  as  a  starting  point, 
Doctor,  we'll  have  smooth  sailing  the  rest  of  our 
way. 


CHAPTER  XIII. 
Artificial    Instruments    of   Social   Service. 

At  our  last  interview  we  were  intending  to  speak 
a  little  more  specifically,  Doctor,  about  artificial 
instruments  of  social  service  as  distinguished  from 
natural  instruments.  Certainly,  I  allude  to  the 
entire  class,  to  all  the  artificial  instruments  of 
social  service,  including  artificial  materials  as  well 
as  tools — that  is,  to  all  the  materials  and  tools  of 
production  and  distribution  that  are  shaped  by 
human  activity.  "Distribution"?  yes,  I  am  now 
using  this  word  in  the  sense  of  transportation, 
sale,  delivery,  and  not  in  the  sense  of  division  of 
profits.  I  have  said,  you  will  remember,  that  arti- 
ficial instruments,  while  not  necessary  as  a  con- 
dition of  producing  consumable  things,  are  abso- 
lutely so  as  part  of  the  process.  Think  a  moment, 
Doctor,  of  the  absolute  necessity,  as  part  of  the 
productive  process,  of  those  artificial  instruments, 
including  artificial  materials — "capital,"  as  Pro- 
fessor Eutley  would  have  called  the  whole  thing, — 
think  of  the  impossibility  of  getting  along  in  a 
human  way  without  them. 

Did  it  ever  occur  to  you  that  they  are  absolutely 
necessary  to  human  life?  Yes,  to  any  kind  of 
human  life,  even  to  solitary  human  life.  Animals, 
mere  animals,  may  live  without  artificial  instru- 
ments ;  but  man  cannot  do  so  long,  without  falling 
to  the  level  of  mere  animals.  He  would  have  to  go 
naked,  for  clothing  cannot  be  made  without  arti- 
ficial instuments.  He  would  often  have  to  go 
hungry,  for  food  cannot  be  cultivated  or  stored 


ARTIFICIAL  INSTRUMENTS.  251 

without  them.  He  could  not  even  get  water  to 
drink  except  as  he  waded  into  a  river  or  crawled 
upon  his  belly  to  the  edge  of  a  brook  or  a  spring 
and  lapped  it  like  a  dog  or  sucked  it  up  like  a 
horse  or  a  cow.  As  for  housing,  he  would  have  to 
roost  upon  tree  branches,  or  sleep  under  the  open 
sky,  or  hide  in  natural  caves;  for  no  artificial 
shelter  is  possible  without  artificial  instruments. 
The  instruments  may  be  crude  enough,  but  instru- 
ments there  must  be  and  artificial  at  that.  How 
long  do  you  think  it  would  take  to  turn  us  all  into 
filthy  brutes,  if  artificial  instruments  in  aid  of  the 
satisfaction  of  our  natural  wants  were  "taboo"? 
Don't  you  think  that  two  or  three  generations 
would  do  it  for  us,  quite  disgustingly  if  not  quite 
completely  ? 

Social  service  would  be  almost  altogether  out  of 
the  question  from  the  word  go.  One  couldn't  carry 
water  to  another  without  a  vessel,  which  would  be 
an  instrument  in  some  degree  artificial ;  and  while 
a  few  interchanges  might  be  possible — a  handful 
of  berries  or  nuts  or  roots  literally  carried  in  the 
hand,  or  a  chunk  of  edible  flesh,  if  you  choose  to 
regard  those  things  as  lacking  in  the  artificial 
quality,  which  in  strictness  they  certainly  would 
not  be — yet  the  very  limited  possibilities  and  their 
attendant  difficulties  would  be  likely  to  discourage 
even  such  simple  interchanges  as  might  be  feas- 
ible. We  never  realize,  Doctor,  how  extreme  is  our 
need  for  artificial  instruments  of  production  until 
we  think  of  how  we  should  fare  without  them.  But 
when  we  do  this,  we  see — if  we  are  honest  with 
ourselves — that  social  service  is  absolutely  depend- 
ent upon  artificial  instruments.  Even  in  its  sim- 
plest operations,  it  is  impossible  without  artificial 
instruments  of  simple  form  at  least,  including  ar- 
tificial materials  of  simple  substance ;  and  as  it  be- 
comes more  and  more  mighty  in  its  powers,  and 
infinitely  more  complex  in  its  processes,  and  there- 


252  SOCIAL    SERVICE. 

fore  incalculably  more  useful  in  its  possibilities, 
social  service  requires  artificial  instruments,  gigan- 
tic in  magnitude,  delicate  in  adjustment,  and  in- 
creasingly complex  in  operation. 

The  change  is  so  tremendous  as  to  seem  like 
revolution  instead  of  progression,  and  many  his- 
torical students  are  stunned  by  it.  In  their  mind's 
eye  they  see  a  civilization  in  which  men  used  arti- 
ficial instruments,  transformed  into  one  in  which 
artificial  instruments  seem  almost  literally  to  use 
men. 

Nor  does  this  social  mirage  appear  to  any  of  us 
to  be  as  absurdly  upsidedown  as  it  really  is.  You 
and  I  look  back  to  our  boyhood,  Doctor,  and  be- 
hold one  of  the  carpenters  we  knew,  with  a  kit  of 
tools  upon  his  back  ready  at  the  word  to  serve  any 
of  our  neighbors  who  wanted  his  service,  by  build- 
ing or  repairing  almost  anything  from  a  dog  house 
for  "Tige"  at  the  front  gate,  to  a  bureau  for 
mother's  bedroom  or  a  desk  for  father's  den,  to  say 
nothing  of  a  huge  barn  for  the  cattle.  But  how  is 
it  now?  The  wide  range  of  work  in  which  the 
carpenters  of  our  youth  were  skilled,  and  which 
they  could  do  with  the  handsaw  and  hammer  and 
chisel  and  square  and  auger  and  gimlet  and  adze 
that  they  carried  in  their  kits,  or,  if  they  were 
thoroughly  equipped,  in  their  tool  chest  the  size 
of  a  trunk — this  wide  range  of  work  is  now  so 
minutely  specialized,  the  tools  are  so  large  and 
coetly,  and  the  methods  of  operation  are  so  intri- 
cately organized,  that  the  worker  in  wood  must 
seek  employment  of  a  master,  usually  a  soulless 
corporation,  in  some  great  factory.  He  seems  no 
longer  to  carry  on  his  trade  with  artificial  instru- 
ments of  social  service ;  they  seem  indeed  to  carry 
on  their  trade  with  him. 

No,  I  do  not  believe  that  it  really  is  so.  I  do 
not  believe  that  the  gigantic  tools  of  today  really 
do  own  the  worker  of  today.  No,  again,  I  do  not 


ARTIFICIAL  INSTRUMENTS.  253 

believe  that  the  owners  of  the  tools  exploit  the 
workers,  through  owning  the  tools.  You  may 
think  it  a  paradox  when  I  say  that  although  the 
social  service  workers  of  today  are  absolutely  de- 
pendent for  social  life  upon  artificial  instruments 
of  production,  yet  they  are  not  dependent  upon  the 
owners  of  those  instruments.  But  it  isn't  even  a 
paradox:  for  a  paradox  is  an  apparent  contradic- 
tion which  is  not  a  contradiction  in  fact,  and  there 
is  not  even  an  apparent  contradiction  here.  Yes,  I 
will  explain. 

What  if  I  should  say  that  spiders  dre  absolutely 
dependent  upon  spider  webs  for  catching  flies,  but 
add  that  they  would  not  be  dependent  upon  own- 
ers of  spider  webs  if  there  were  owners  who  owned 
all  existing  webs?  There  would  be  no  contradic- 
tion in  that,  would  there?  You  would  instantly 
say  that  as  spiders  make  all  the  spider  webs  they 
need,  their  deprivation  of  existing  webs  by  web- 
owners  could  at  the  worst  only  inconvenience  them 
temporarily.  Well,  the  principle  is  the  same. 
Human  workers  in  the  social  service  market,  not 
only  need  to  use  artificial  instruments  of  produc- 
tion, but  they  make  them,  make  them  all — not 
merely  did  make  them  once,  but  do  make  them 
now — make  them  right  along,  all  the  time. 

It  is  just  here  that  the  philosophy  of  our  so- 
cialistic friend  breaks  down.  In  his  talks  with 
us  he  is  mighty  near  right  most  of  the  time,  even 
if  he  doesn't  always  hold  his  righteous  wrath  in 
polite  restraint.  I  don't  mind  that,  for  I  believe 
with  Charles  Lamb  that  good  temper  in  argument 
is  not  necessarily  evidence  of  sound  doctrine.  The 
cynic  will  support  a  falsity  with  good  temper, 
while  the  earnest  man  defending  a  truth  gets 
angry  at  cynical  opposition.  So  our  socialistic 
friend  is  often  right  even  in  the  heat  of  his  anger. 
But  I  think  he  goes  off  on  the  wrong  scent  when 
he  attributes  the  economic  weakness  of  the  "work- 


254  SOCIAL    SERVICE. 

ing  class" — as  he  calls  the  working  interests  in  the 
social  service  market, — to  ownership  of  the  artifi- 
cial instruments  of  production  by  the  "capitalist 
class,"  a  term  by  which  he  designates  parasitic  in- 
terests. The  economic  weakness  of  the  working 
interests  is  indeed  due  to  their  segregation  from 
indispensable  instruments  of  production;  but  it  is 
not  due  primarily  to  their  segregation  from  those 
which,  though  indispensable,  are  artificial.  This 
segregation  is  a  result,  not  a  cause. 

How  could  it  possibly  be  due  to  that?  If  the 
working  interests  themselves  produce  all  artificial 
instruments  of  production,  how  can  the  working 
interests  be  segregated  from  them?  There  are 
only  two  ways,  Doctor.  One  is  some  form  or  other 
of  the  old  slavery  way  of  making  the  master  the 
owner  of  all  the  slave  produces.  But  the  evil  here 
is  the  assumption  of  sovereignty  over  the  man 
himself;  all  the  rest  is  incidental  to  that.  The 
other  way  is  crudely  typified  by  one  of  the  free- 
man phases  of  feudalism.  While  the  worker  might 
have  been  free  under  feudalism,  and  nominally 
the  owner  of  all  his  products,  the  landlord  owned 
his  indispensable  natural  instruments  of  produc- 
tion, and  by  means  of  that  lever  of  coercion  indi- 
rectly confiscated  his  products.  But  here  the  evil 
was  the  landlord's  ownership  of  the  natural  instru- 
ments; all  the  rest  was  incidental. 

This  latter  coercive  force  has  come  down  into 
our  own  times  and  country  as  one  of  the  phases 
of  capitalism.  It  has  come,  moreover,  with  power 
enormously  magnified  and  subtlety  intensely  re- 
fined. Of  that,  however,  we  must  speak  on  another 
occasion.  At  present  I  don't  wish  to  dwell  on  the 
subject  of  natural  instruments.  What  I  want  is 
to  have  you  grasp  the  full  function  in  social  serv- 
ice of  the  artificial  ones,  and  to  measure  the  full 
scope  of  the  power  their  monopoly  can  exercise 
over  the  labor  interests  of  the  social  service  mar- 


ARTIFICIAL  INSTRUMENTS.  255 

ket.  Observe  my  point.  Monopoly  of  the  artificial 
instruments  of  production  does  give  coercive  eco- 
nomic power,  but  not  in  itself ;  and  whether  these 
instruments  be  the  carpenter's  little  kit  of  tools  of 
our  boyhood,  or  the  great  factory  of  today,  makes 
no  difference.  My  reason  for  this  belief  is  that 
the  labor  interest  of  the  social  service  market,  tak- 
ing that  interest  as  a  whole,  not  only  needs  these 
artificial  instruments  as  vitally  as  the  spider  needs 
his  web,  but  makes  and  remakes  them  as  truly  as 
the  spider  makes  and  remakes  webs, — and  this 
continuously. 

Yes,  no  doubt  of  it;  our  good  friend  down  the 
street  would  say  that  each  spider  can  make  his 
own  web,  whereas  no  modern  workingman  can 
make  his  own  artificial  instruments  of  production, 
or  use  them  alone  if  he  could  make  them.  But 
the  principle  of  my  spider-web  illustration  would 
be  the  same  if  it  took  many  spiders  to  make  a  web. 
Even  then,  spiders  couldn't  be  exploited  as  a 
whole;  and  as  long  as  they  had  a  place  for  their 
web  and  were  not  prevented  from  co-opera,ting 
they  couldn't  be  exploited  individually.  The  same 
is  true  of  workingmen.  Given  the  natural  instru- 
ments of  production,  and  freedom  to  trade  among 
themselves — no  prevention  of  co-operation,  don't 
you  see — and  nobody  could  exploit  the  labor  of 
any  of  them. 

I  do  indeed  remember  very  well  how  our  friend 
has  told  us  that  a  worker  cut  off  from  the  big  ma- 
chine "which  works  him"  and  which  he  can  never 
hope  to  own,  is  as  helpless  as  a  boy  in  a  boat  a 
thousand  miles  from  shore;  that  a  machine-using 
animal  without  machinery  is  as  pitiable  an  object 
as  a  land-using  animal  without  land.  And  what 
ne  says  is  true.  That  is,  it  is  true  of  a  worker. 
But  it  is  not  true  of  working  interests  as  a  whole. 
Aye,  "working  class"  as  a  whole,  if  you  desire  for 
convenience  of  conversation,  provided  we  do  not 


256  SOCIAL    SERVICE. 

allow  the  word  "class"  to  confuse  us.  If  we  adopt 
it  we  must  stick  to  the  meaning  of  our  socialist 
friend  when  he  falls  back  upon  Marx  and  calls  it 
an  expression  of  the  entire  working  force  or  en- 
ergy in  society  regardless  of  individual  functions, 
or  something  to  that  effect.  If  we  use  the  word 
"class"  we  must  draw  the  line  at  useful  work  by 
whomsoever  done,  and  not  narrow  it  so  as  to  in- 
clude nobody  but  hired  men.  And  if  we  say  work- 
ing class  instead  of  working  interest,  we  must  rec- 
ognize that  every  one  is  of  the  working  class  to  the 
degree  that  he  is  a  social  servitor,  even  though  the 
rest  of  him  is  of  the  exploiting  or  parasitic  class. 
I  prefer  "labor  interest"  to  "labor  class" ;  but  with 
that  understanding  we'll  say  "class." 

Now  it  is  quite  true,  as  you  remind  me,  that  our 
friend  admits  that  the  working  class  as  a  whole 
would  not  be  quite  as  helpless  as  the  boy  in  a  boat 
a  thousand  miles  from  shore,  even  if  this  class 
were  cut  off  from  all  existing  machinery.  He  in- 
sists, however,  that  the  workers  would  be  at  great 
inconvenience;  and  I  agree  with  him,  although  I 
don't  think  the  inconvenience  would  continue  as 
long  as  he  does.  In  my  prophetic  vision  the  grind- 
ing inconvenience  could  last  but  a  few  months, 
and  the  social  service  market  would  be  better 
equipped  with  artificial  instruments  after  a  decade 
than  it  is  now.  Look  at  San  Francisco  after  the 
earthquake,  at  Chicago  after  the  fire,  at  Galveston 
after  the  flood ;  and  remember  that  the  labor  class 
— that  is,  the  labor  interests  of  society — did  it  all. 

Our  friend's  prophetic  vision  looks  at  this  pros- 
pect through  the  other  end  of  the  opera  glass.  Yet 
he  does  admit  that  before  very  long  the  labor  class 
would  replace  all  the  artificial  instruments  we  now 
have,  with  as  good  or  better  ones,  even  if  it  were 
so  completely  cut  off  from  those  that  exist  as  to 
be  obliged  to  dig  the  next  minerals  with  fingers 
and  to  cut  the  next  sticks  with  flints.  So  far  we 


ARTIFICIAL  INSTRUMENTS.  257 

agree.  And  I  reckon  that  if  it  came  down  to  brass 
tacks  he  and  I  would  also  agree  that  if  the  labor 
class  or  interest  were  cut  off  from  all  existing  arti- 
ficial instruments,  it  wouldn't  be  necessary  to  re- 
place many  of  them  except  as  they  wore  out.  For 
if  labor  were  cut  off  from  them  they  would  go  to 
waste,  and  with  that  prospect  their  owners  would 
make  pretty  liberal  labor  terms.  Don't  you  think 
they  would  probably  give  to  the  labor  class  its  full 
earnings  just  for  the  sake  of  having  the  machines 
used  so  as  to  pay  for  themselves? 

Why,  Doctor,  imagine  what  would  happen  if  a 
new  continent  were  to  spring  up  over  night  out  in 
the  Atlantic,  say  fifty  miles  from  the  coast.  Ah, 
yes,  there  is  no  difficulty  in  imagining  what  would 
happen  if  our  present  land  laws  were  to  apply. 
Every  fellow  that  could  get  a  boat  would  rush  over 
and  stake  out  a  big  claim,  so  as  to  have  the  power 
of  imposing  terms  upon  labor.  Every  body  would 
try  to  be  a  landlord  on  this  new  continent.  Ev- 
erybody would  go  over  to  exploit  laborers,  not  to 
do  labor.  But  suppose  that  in  some  way  it  were 
fixed  so  that  nobody  could  have  any  more  of  that 
continent  than  he  actually  put  to  the  best  and  full- 
est use.  That  would  discourage  the  land  grab- 
bers, wouldn't  it?  And  if  it  were  a  fertile  conti- 
nent, this  new  continent  out  in  the  Atlantic,  work- 
ers would  go  over  there  in  droves  and  work  co-op- 
eratively for  themselves.  You  ask  how  they  would 
get  there!  Do  you  suppose  that  great  masses  of 
men,  including  those  who  know  how  to  cut  timber 
and  to  build  boats,  would  be  at  any  serious  diffi- 
culty in  crossing  that  fifty  miles  of  water,  if  after 
they  got  there  they  were  to  be  subject  to  no  ex- 
actions from  land-grabbing  "sooners"?  You  may 
bet  your  boots  they  would  get  there.  And  what 
would  they  do  for  capital  after  getting  there? 
}fake  it,  of  course.  An  army  of  men  will  soon 
make  all  necessary  capital  if  you  give  them  access 


258  SOCIAL  SERVICE. 

to  the  raw  material.  Look  at  your  diagrams 
again,  Doctor.  Don't  you  see  that  Human  Activ- 
ity with  Natural  Instruments  produces  everything, 
including  Artificial  Instruments? 

But,  Doctor,  the  real  joke  of  the  thing  is  this, 
that  there  might  be  no  migration  at  all  to  that 
new  continent — not  for  the  purpose,  at  any  rate, 
of  getting  where  you  could  keep  all  your  own  earn- 
ings. For  the  very  fact  that  there  was  such  a 
place,  so  easily  accessible  and  so  inviting  to  all  en- 
ergetic workingmen,  would  put  this  old  continent 
into  competition  for  workers.  The  New  Continent 
would  say,  almost  in  words:  "Come  over  here, 
boys,  and  work,  and  no  one  shall  fleece  you."  And 
how  do  you  suppose  the  Old  Continent  would  re- 
spond? Almost  in  words,  also,  wouldn't  it  say: 
"Stay  here,  boys,  and  you  shall  hereafter  keep  all 
you  earn."  And  if  the  New  Continent  called 
back,  "Come  over  here  and  you  shall  own  all  the 
capital  you  create,"  wouldn't  the  old  Continent 
reply:  "Stay  here  and  you  shall  not  only  own  all 
the  capital  you  create  but  you  shall  have  the  use 
of  all  the  old  capital  to  create  it  with." 

I  tell  you,  Doctor,  there  is  no  coercive  power  to 
the  monoply  of  capital  except  as  it  is  derived 
from  the  monopoly  of  land.  Put  free  land  into 
competition  with  monopolized  land,  and  monopoly 
of  capital  would  disappear.  But  with  monopoly 
of  land,  monopoly  of  capital  is  as  destructive  to 
labor  interests  as  our  socialistic  friend  says  it  is. 

He  doesn't  look  at  the  matter  as  I  do,  but  I  think 
him  mistaken.  Suppose  we  summarize  his  point. 
Doesn't  it  amount  to  this:  That  the  labor  class 
uses  machinery ;  the  labor  class  is  dependent  upon 
machinery ;  the  labor  class  produces  and  maintains 
machinery;  the  labor  class  has  been  despoiled  of 
the  machinery  it  has  produced  in  the  past,  and  is 
being  thereby  despoiled  of  the  machinery  it  does 
produce  in  the  present.  While  he  admits  that  the 


ARTIFICIAL  INSTRUMENTS.  259 

labor  class  could  reproduce  the  machinery  of 
which  it  has  been  despoiled,  he  seems  to  admit  it 
as  an  academic  theory  only,  and  to  deny  it  as  a 
practical  possibility  of  capitalistic  social  life.  He 
appears  to  think  that  the  labor  class  would  not  be 
patiently  cohesive  long  enough  to  pass  through 
the  period  of  reconstruction  successfully.  At  any 
rate  I  so  understand  him. 

Now  of  the  labor  class  as  a  group  of  distinguish- 
able or  classifiable  persons  our  friend's  conclusion 
might  be  true.  But  of  the  labor  interest  as  a  so- 
cial service  force,  I  don't  think  it  is  true.  Our 
friend  ignores  the  pressure  of  those  natural  laws 
of  social  service  which  you  and  I  have  been  over 
and  accepted.  Let  us  review  them  in  the  light  of 
his  sociological  doubts.  Do  you  recall  the  first  of 
those  laws,  our  "sign  of  the  thumb"  ?  It  reminds 
us  that  men  seek  to  satisfy  their  desires  with  the 
least  exertion — the  social  service  law  of  the  line 
of  least  resistance.  Then  the  "sign  of  the  index 
finger":  the  direction  of  the  demand  for  serv- 
ice determines  the  character  of  the  supply  of  serv- 
ice— the  equation  of  supply  and  demand,  mind 
you.  Next,  the  "middle  finger":  every  one  who 
works,  virtually  produces  what  he  buys  with  his 
work.  Next,  the  "sign  of  the  third  finger":  mu- 
tuality of  competition,  if  unobstructed,  gives  his 
full  earnings. to  each  worker.  Pursuant  to  those 
natural  laws  of  social  service,  Doctor,  wouldn't 
the  labor  interests  of  society  get  and  keep  the  arti- 
ficial instruments  of  production  they  produced, 
immediately  upon  the  removal  of  the  fundamental 
obstructions  to  the  free  operation  of  those  laws  ? — 
upon  the  removal  of  obstructions  to  trade  and  of 
interferences  with  access  to  land?  And  wouldn't 
every  worker  get  about  in  proportion  to  his  con- 
tribution of  work? 

Since  everybody  seeks  to  satisfy  his  wants  with 
the  least  exertion,  the  labor  interests  would  surely 


260  SOCIAL    SERVICE. 

hare,  as  indeed  they  have  already,  a  common  im- 
pulse to  utilize  the  easiest  possible  modes  of  pro- 
duction and  to  secure  the  largest  possible  share 
therein. 

Since  this  impulse  regulates  demand  and  sup- 
ply in  the  social  service  market,  an  increase  in  the 
supply  of  artificial  instruments  would  instantly 
follow  any  attempt  at  monopolizing  the  existing 
supply,  and  thereby  lessen  the  monopoly  of  all, 
until  the  point  of  no  monopoly  had  been  reached. 

Since  every  one  who  works  produces  in  effect 
what  he  buys  with  his  work,  acquiring  what  he 
works  for  in  exchange  for  what  he  works  at, 
every  worker  wanting  an  interest  in  the  gigantic 
artificial  instruments  of  production  would  not 
only  in  effect  produce,  but  would  retain,  an  in- 
terest in  so  much  of  such  instruments  as  he  might 
need  to  prevent  his  being  cut  off  from  access  to 
artificial  tools  of  production. 

And  inasmuch  as  mutual  competition  gives  full 
earnings  to  each  worker,  maintaining  an  equilib- 
rium at  which  each  gets  of  what  he  wants  the 
equivalent  of  what  he  produces,  no  worker  would 
be  underpaid. 

Operating  freely  together  these  natural  laws  of 
capitalism — the  essence  of  which  is  free  contract 
on  a  basis  of  contractual  equity — would  secure  to 
the  labor  interest  or  class,  what  our  friend  hopes 
to  secure  to  it  only  by  abolishing  capitalism  or 
"evoluting"  out  of  it.  It  would  do  it  easier,  I  am 
sure ;  and  better,  much  better,  I  think. 

The  reason  this  much  to  be  desired  result  is 
not  already  experienced,  Doctor,  is  because  those 
natural  laws  of  capitalism  are  not  allowed  to  work 
freely.  Reflect  upon  it  and  I  think  you  will  agree 
with  me.  Conventional  laws  and  social  institu- 
tions with  reference  to  property,  have  placed  ob- 
structions in  the  way  of  the  free  operation  of 
those  natural  laws.  Among  the  obstructions  are  a 


ARTIFICIAL  INSTRUMENTS.  261 

variety  of  conventional  laws  that  prevent  mutual- 
ity of  competition,  thereby  unbalancing  supply  and 
demand  and  making  service  coercive  instead  of  co- 
operative. This  alone  would  put  the  labor  inter- 
est, the  labor  class,  if  you  please,  at  a  deadly  dis- 
advantage. But  other  conventional  laws  and  insti- 
tutions are  even  more  fundamental  in  their  evil 
operation. 

In  the  last  analysis  all  obstructions  to  the  free 
operation  of  these  natural  laws  spring  from  gov- 
ernmental power.  International  commerce  is  bur- 
dened with  tariffs;  domestic  production  and  com- 
merce are  burdened  with  taxes  levied  in  proportion 
to  the  expenditures  of  productive  energy;  inven- 
tions are  monopolized  on  the  one  hand  by  means 
of  patent  laws,  which  forbid  their  production,  and 
discouraged  on  the  other  by  the  operation  of  those 
patents,  which  interfere  with  the  production  of 
kindred  yet  different  inventions — and  especially 
with  improvements  upon  patented  inventions.  But 
the  misuse  of  governmental  power  that  is  funda- 
mental and  all  inclusive  in  its  obstruction  to  the 
operation  of  natural  laws  of  social  service,  is  that 
misuse  of  this  power  which  makes  private  mo- 
nopoly of  the  natural  instruments  of  production. 
It  is  to  the  power  of  this  monopoly  that  the  monop- 
oly of  artificial  instruments  is  traceable,  and  of 
that  power  I  shall  ask  you  to  think  with  me  when 
we  meet  again. 


CHAPTER  XIV. 

Natural  Instruments  of  Social  Service  and 
Their  Capitalization. 

At  our  last'  conversation  I  waa  saying, 
Doctor,  that  it  is  monopoly  of  the  natural  in- 
struments of  production  to  which  the  monopoly 
of  artificial  instruments  is  traceable.  In  reality, 
therefore,  it  is  that  monopoly,  and  not  monopoly 
of  the  artificial  ones,  which  coerces  the  working 
interests  of  the  social  service  market  and  despoils 
them.  Our  socialist  friend  down  the  street  con- 
tends that  it  is  monopoly  of  both,  and  I  am  ad- 
mitting that  in  a  superficial  way  he  is 
right.  Both  are  in  fact  monopolized ;  and  the 
ill  effect  of  this  double  monopolization  is  most 
keenly  felt  by  hired  workingmen,  especially  at 
their  point  of  contact  with  the  artificial  instru- 
ments. But  my  contention  is  that  under  condi- 
tions otherwise  free,  there  could  be  no  monopoly 
of  artificial  instruments  without  monopoly  of  the 
natural  ones.  By  "otherwise  free"  I  mean  in  the 
absence  of  slavery,  patent  monopoly  laws,  or  other 
direct  coercion  of  the  person. 

Isn't  it  clear  to  you? — it  seems  clear  enough  to 
me,  at  all  events, — that  with  the  natural  instru- 
ments of  production  and  delivery  unmonopolized, 
and  with  men  unenslaved  personally,  artificial  in- 
struments unpatented  could  not  be  monopolized. 
Wouldn't  it  be  altogether  impossible  ?  On  the  oth- 
er hand,  isn't  it  equally  clear  that  even  though 
men  were  personally  free,  and  there  were  no  pat- 
ents forbidding  production,  yet  if  the  natural  in- 
struments of  production  were  monopolized,  mo- 


NATURAL  INSTRUMENTS.  263 

nopoly  of  artificial  instruments  would  inevitably 
result  ? 

What's  the  use,  then,  of  insisting  that  economic 
coercion  of  labor  interests  is  due  to  monopoly  of 
both  kinds  of  instruments  ?  And  what's  the  use  of 
proposing  schemes  for  subjecting  both  to  regula- 
tion, or  governmentalization,  or  socialization,  or 
communalization,  or  whatever  else  you  choose  to 
call  it  ?  Why  not  hit  the  efficient  cause  plumb  in 
its  solar  plexus  and  knock  it  out  ?  Why  not  estab- 
lish equity  with  reference  to  artificial  instruments 
indirectly,  by  establishing  it  directly  with  refer- 
ence to  natural  instruments?  Why  not  establish 
it  with  reference  to  the  former  as  the  consequence, 
by  establishing  it  with  reference  to  the  latter  as 
the  cause? 

But  our  socialistic  friend  is  no  fool,  Doctor,  as 
you  very  well  know ;  and  if  -we  try  to  get  his  point 
of  view,  instead  of  insisting  upon  putting  every- 
thing he  says  to  the  test  of  our  own  point  of  view 
alone,  I  think  we  shall  find  a  valid  reason  for 
what  we  regard  as  his  misapprehension.  I  may  be 
mistaken,  of  course,  but  I  am  under  the  impression 
that  I  know  his  reason,  and  that  on  the  face  of  it 
it  is  a  good  one.  Some  of  these  days  I  shall  ven- 
ture to  elaborate  it  a  little,  but  not  now.  I  allude, 
however,  to  the  fact,  upon  which  he  lays  great 
stress,  and  rightly  so,  that  we  are  living  in  a  capi- 
talistic age. 

Everything  that  will  yield  an  income  is  capi- 
talized. It  has  a  selling  value,  a  capitalization, 
based  upon  expectations  of  its  power  to  save  the 
cost  of  labor.  A  certain  machine,  let  us  say,  is 
capable  of  producing  as  much  wealth  with  the 
labor  of  one  man  as  ten  men  could  produce  with- 
out it.  It  will,  therefore,  yield  to  the  owner,  if 
he  allows  it  to  be  used,  a  certain  annual  net  in- 
come over  its  cost  and  the  wages  for  operating  it ; 
and  the  expectation  of  this  net  return  will  give 


264  SOCIAL    SERVICE. 

to  the  machine  a  selling  or  capitalized  market 
value  in  proportion  to  the  rate  of  commercial  in- 
terest. If  interest  is  5  per  cent  a  year,  a  machine 
with  a  potential  net  yield  of  $100  a  year  will  capi- 
talize on  the  basis  of  what  is  called  "a  20-year 
purchase."  Don't  you  see  it?  Listen.  If  you 
had  an  assured  income  of  a  hundred  a  year, 
wouldn't  you  sell  out  if  anybody  would  buy  for  a 
satisfactory  price?  Well,  you  wouldn't  sell  out 
for  one  year's  purchase,  would  you?  You  would 
want  more  than  a  hundred  dollars,  I  guess,  for 
turning  over  to  somebody  else  your  right  to  a  hun- 
dred a  year.  Yes,  indeed.  All  right,  but  how 
would  you  figure  out  how  many  years'  purchase 
you  ought  to  get?  How  would  you  decide  upon 
what  capital  sum  you  ought  to  have?  Of  course, 
of  course;  that's  it.  You'd  say  this  is  a  question 
of  interest  on  capital,  and  as  interest  is  5  per  cent, 
our  old  rule-of -three  will  teU  me  what  I  ought  to 
have.  And  so  you  would  figure :  As  5  per  cent  is 
to  100  per  cent,  so  is  $100  to  the  capitalized  value 
of  my  100-dollar  annuity ;  and  by  our  old  rule-of- 
three  that  would  be  $2,000. 

Oh,  no  doubt,  no  doubt;  other  factors  would 
enter  into  the  bargain,  and  these  would  make  the 
capitalization  somewhat  higher  or  somewhat  low- 
er. But  approximately,  $2,000  would  be  the  capi- 
talization of  your  $100  annuity  under  a  commer- 
cial regime  of  5  per  cent  interest;  and  for  simi- 
lar reasons  this  would  be  the  capital  value  of  the 
machine  if  its  working  life  were  approximately 
twenty  years.  If  the  machine  were  reproducible  for 
less  than  $2,000,  then  to  be  sure  it  would  sell  for 
less ;  but  in  that  case,  other  things  being  the  same, 
it  would  yield  less,  than  $100  a  year  on  a  5-per  cent 
interest  market.  By  no  possibility  would  a  ma- 
chine reproducible  for  a  thousand  dollars  yield  as 
much  annually,  measured  by  value,  as  one  repro- 
ducible for  not  less  than  two  thousand  dollars,  no 


NATURAL,  INSTRUMENTS.  265 

matter  what  the  rate  of  interest  might  be.  The 
point  is,  you  see,  not  that  the  exact  relation  of  100 
to  2,000  exists  under  all  circumstances;  but  that 
there  does  exist,  with  approximate  constancy,  a 
proportion  between  income  and  capitalization,  the 
determining  factor  of  which  is  the  rate  of  interest. 
Given  rate  of  interest  and  capital  value,  and  you 
figure  out  approximate  annual  income;  given  an- 
nual income  and  rate  of  interest,  and  you  figure 
out  approximate  capital  value.  That's  all  there  is 
to  it — allowing,  of  course,  for  risk  and  repair. 

Now,  in  a  commercial  regime  it  is  precisely  the 
same  with  natural  instruments — with  places  or 
sites,  that  is,  and  the  resources  of  this  old  planet 
of  ours.  Here  is  a  piece  of  land,  let  us  say — a 
space  on  the  planet,  which  is  the  natural  roof  of  a 
mine,  the  natural  site  of  a  building,  or  the  natural 
location  of  a  farm.  If  this  bit  of  land  will  yield 
to  the  owner  a  certain  annual  net  income  over  and 
above  the  cost  of  necessary  artificial  instruments 
and  the  wages  of  necessary  labor,  won't  the  expecta- 
tion of  that  income  give  to  the  land  a  selling  or  cap- 
italized value  ?  And  won't  that  capitalized  value  be 
determined  in  the  case  of  the  land,  precisely  as  in 
the  case  of  the  machine,  by  the  rate  of  commercial 
interest?  Surely.  If  interest  is  5  per  cent,  a 
piece  of  land  with  an  expectant  net  yield  of  a  hun- 
dred a  year  will  capitalize  on  the  basis  of  a  30- 
years'  purchase. 

So  it  makes  no  difference  to  the  capitalist,  don't 
you  observe? — and  please  do  observe  it,  for  here 
we  are  at  a  vital  point  in  the  difference  between 
our  socialistic  friend's  industrial  philosophy  and 
mine — it  makes  no  difference  to  the  capitalist,  I 
say,  whether  he  owns  this  land  or  that  machine. 
His  property  of  both  kinds  will  be  approximately 
identical  in  capitalized  value. 

And  it  would  be  the  same  with  a  slave,  if  slav- 
ery were  itill  a  business  institution,  as  it  was  in 


266  SOCIAL    SERVICE. 

the  commercial  centers  of  the  South  In  our  school 
days.  Under  a  5-per  cent  interest  regime,  a  slave 
with  an  expectation  of  20  years  of  full  productive 
life  averaging  $100  a  year  over  and  above  the  ex- 
pectation of  his  "keep,"  would  capitalize  on  the 
basis  of  20  years,  which  would  be  $2,000,  precisely 
as  in  the  case  of  machines  or  land. 

Don't  you  see,  then,  that  in  a  capitalistic  era, 
it  makes  no  difference  to  the  capitalist — acciden- 
tal differences  apart, — whether  he  owns  a  $2,000 
machine,  which  is  an  artificial  instrument  of  pro- 
duction, or  a  $2,000  piece  of  land,  which  is  a  nat- 
ural instrument  of  production,  or  a  $2,000  labor- 
er? Interchangeable  on  an  equality,  because  they 
are  capable  of  yielding  about  the  same  net  income, 
the  essential  differences  of  those  essentially  dif- 
ferent things  are  obscured  by  their  value  identity. 
We  are  apt  to  lose  sight  of  their  importance  as 
"use  values/'  to  adopt  our  socialist  friend's  term, 
by  confining  our  attention  to  what  he  calls  their 
"exchange  value."  Business  men  habitually  think 
of  them  as  altogether  identical  in  character  be- 
cause they  are  interchangeable  as  commodities; 
and  our  socialistic  friend  stumbles  at  the  same 
capitalistic  hurdle  that  trips  up  the  business  man. 

The  lesson  to  be  learned  from  this  is  that  nat- 
ural instruments  are  natural  instruments  whether 
capitalized  or  not,  that  artificial  instruments  are 
artificial  instruments  whether  capitalized  or  not, 
and  that  laborers  are  men  whether  capitalized  or 
not.  Capitalizing  them  does  not  change  their 
character,  nor  their  nature;  it  does  not  obliterate 
their  essential  differences;  it  does  not  obviate  the 
necessity  of  distinguishing  between  them.  We 
must  reason  about  the  planet  as  man's  natural 
standing  place  and  natural  storehouse,  about  man 
as  the  monarch  of  the  planet,  and  about  the  arti- 
ficial products  he  draws  forth  from  the  bosom  of 
the  planet, — we  must  reason,  I  say,  about  these 


NATURAL  INSTRUMENTS.  267 

three  fundamentally  different  things  with  the 
same  recognition  of  their  fundamental  differences, 
when  they  are  capitalized  and  their  essential  char- 
acteristics obscured  by  commercial  valuation,  as 
if  they  were  owned  by  three  distinct  classes  of 
persons  and  under  three  distinct  kinds  of  title. 

Oh,  yes ;  I  have  heard  all  that  talk  about  value 
being  homogeneous,  about  its  being  one  in  volume 
and  indivisible  in  character.  But  so  is  water  in 
a  tank  one  in  volume,  and  homogeneous  and  in- 
divisible in  character;  and  yet  we  analyze  it  into 
its  chemical  substances.  Why,  then,  may  we  not 
analyze  values  into  their  economic  substances? 
Not  only  can  we  do  this,  but  we  must  do  it  if  we 
are  to  reason  about  value. 

Just  go  back  to  your  "Uncle  Tom's  Cabin" 
days,  Doctor,  and  think  a  moment  of  an  old-time 
plantation  down  South.  There  was  a  capitalistic 
investment  there  of  something  like  $100,000,  let 
us  say.  As  a  volume  of  value  it  was  as  homoge- 
neous as  any  volume  of  water  you  ever  saw.  But 
analyze  it,  and  what  do  you  find?  Part  of  it  was 
the  value  of  cotton  gins,  buildings,  growing  cot- 
ton, and  so  on — the  value,  that  is,  of  artificial  in- 
struments, of  capital.  Another  part  was  the  value 
of  slaves — the  value  of  men,  of  capitalized  labor 
power.  And  the  rest  was  the  v,.lue  of  the  site  of  the 
plantation,  of  its  place  on  the  planet — the  value, 
that  is,  of  natural  instruments,  of  land.  All  this 
value  was  homogeneous  in  the  market,  all  one  vol- 
ume as  a  body  of  water  is,  all  indivisible  in  charac- 
ter. It  was  all  "capital,"  if  you  want  to  speak 
loosely  and  after  the  manner  of  men  of  business. 
But  there  were  in  truth  three  kinds  of  capital,  each 
absolutely  different  from  either  of  the  others. 

Make  a  test.  How  could  you  destroy  the  values 
of  those  three  kinds  of  capital  ?  The  value  of  the 
artificial  instruments,  of  the  capital  in  the  strict 
sense,  could  not  be  destroyed  without  destroying 


268  SOCIAL    SERVICE. 

the  instruments  themselves.  No  mere  legislation, 
at  any  rate,  could  wipe  out  their  value,  so  long  as 
they  were  useful  in  social  service.  But  legislation 
could  wipe  out  the  value  of  either  of  the  two  other 
kinds  of  "capital,"  and  without  impairing  its  use- 
fulness in  the  slightest.  An  emancipation  law 
would  destroy  the  value  of  the  labor  "capital;" 
yet  all  the  labor  power  of  the  emancipated  men, 
theretofore  having  a  capitalized  value,  would  re- 
main. So  a  suitable  agrarian  law  would  wipe  out 
the  value  of  the  land  "capital ;"  yet  the  land  with 
all  its  productive  potentialities,  theretofore  hav- 
ing a  capitalized  value,  would  remain. 

The  common  sense  truth  is,  don't  you  see  ?  that 
value  is  not  an  economic  substance  at  all.  As  I 
have  frequently  pointed  out  to  you  in  different 
connections,  it  is  a  mere  mode  of  market  measure- 
ment, similar  in  essential  character  to  other 
modes  of  measurement.  The  owner  of  1,000  feet 
of  lumber  doesn't  own  feet;  he  owns  lumber.  If 
he  trades  it  for  so  many  cubic  yards  of  stone,  the 
substance  he  gets  is  not  cubic  yards,  but  stone.  If 
he  trades  that  for  so  many  pounds  of  salt,  the  sub- 
stance he  gets  is  not  pounds,  but  salt.  And  so 
with  value.  The  owner  of  $1,000  worth  of  lum- 
ber owns  lumber,  not  dollars.  If  he  trades  it  for 
$1,000  worth  of  stone  or  salt,  the  substance  he 
gets  is  stone  or  salt,  and  not  dollars. 

What  if  he  has  a  note  or  a  bond?  Why,  the 
substance  he  owns  in  that  case  is  not  the  value  of 
the  note  or  bond.  He  simply  has  a  legal  right  to 
exact  that  value  measurement  of  lumber,  or  stone, 
or  salt,  or  other  commodity,  from  somebody.  If 
he  owns  100  shares  of  the  stock  of  a  corporation, 
it  is  not  value  he  owns — not  as  a  substance ;  what 
he  owns  is  a  certain  proportion  of  the  commodi- 
ties which  that  corporation  has  the  power  to  dis- 
tribute. His  proportion  will  be  assigned  to  him 
periodically  in  terms  of  money;  but  that  will  be 


NATURAL  INSTRUMENTS.  269 

simply  an  order  on  the  social  service  market  for 
the  commodities,  up  to  the  money  measurement, 
that  he  desires.  Inasmuch  as  this  assignment  is 
periodical,  the  shares  will  have  a  capitalized 
value,  according  to  the  capitalistic  rule  of  three  I 
have  already  referred  to  to-day. 

And  so  it  goes,  Doctor.  The  substantial  thing, 
the  essential  thing,  in  the  social  service  market,  is 
not  values ;  it  is  not  money  terms ;  it  is  not  dollar 
marks  or  other  financial  symbols — no  matter 
whether  they  make  a  homogeneous  and  indivisible 
volume  of  value  or  not.  These  things  are  only 
devices  for  measurements  in  trade.  The  substan- 
tial and  essential  things  are  the  commodities  they 
measure  the  value  of. 

And  when  we  consider  what  commodities  are, 
we  find,  as  I  have  explained  before  and  doubtless 
shall  again,  that  under  capitalism  they  may  fall 
into  three  classes — capitalized  labor,  capitalized 
land,  and  capitalized  capital.  But  don't  allow  the 
fact  of  capitalism,  nor  any  variety  of  terminology, 
to  confuse  you,  Doctor,  as  to  the  essential  differ- 
ences of  these  three  things.  Capitalized  labor 
drops  out  with  the  abolition  of  slavery,  but  labor 
itself  does  not.  Capitalized  land  would  drop  out 
if  differential  advantages  of  location  were  finan- 
cially equalized  by  the  abolition  of  land  monopoly, 
but  land  itself  would  not.  As  to  capitalized  capital, 
you  may  refresh  yourself  with  that  diagram  you 
made  the  other  day  at  my  suggestion.  In  the  last 
analysis,  capital — the  volume  of  artificial  instru- 
ments of  production — is  merely  a  product  of  labor, 
whether  free  labor  or  slave,  applied  to  land, 
whether  monopolized  land  or  not. 

Pardon  me,  Doctor ;  indulge  me  a  little  further. 
I  have  not  yet  wholly  explained  our  socialistic 
friend's  misapprehension  as  I  conceive  the 
explanation  to  be.  I  have  spoken  only  of  the 
habit  he  has  in  common  with  business  men,  of 


270  SOCIAL    SERVICE. 

confusing  the  natural  with  the  artificial  instru- 
ments of  social  service.  This  habit  is  doubtless 
due  very  largely  to  the  fact  of  their  interchange- 
ability,  and  their  consequent  capitalization  in 
common.  Being  the  same  in  capitalistic  appear- 
ance, they  seem  to  him  to  be  in  the  same  category 
of  social  effects  and  causes.  And  you  know  how 
earnestly  our  friend  urges  his  historical  point — 
the  theory  that  we  have  passed  from  the  age  of 
feudalism  into  what  he  regards  as  the  funda- 
mentally different  age  of  capitalism.  He  thinks, 
you  will  recollect,  that  in  consequence  of  this 
change,  monopoly  of  land  has  become  of  less  im- 
portance than  monopoly  of  capital — or  at  any  rate 
of  no  greater  importance.  Here  again  he  ap- 
pears to  me  to  be  under  the  influence  of  a  capi- 
talistic superficiality.  It  is  really,  I  take  it,  first 
cousin  to  the  other  one.  Don't  you  think  it  about 
the  same  ?  Surely  there  can't  be  much  difference. 
If  we  think  of  capital  (an  artificial  and  repro- 
ducible product  of  land),  and  of  land  (the  nat- 
ural and  unproducible  source  of  capital),  as  iden- 
tical because  they  are  interchangeable  in  trade, 
we  are  not  far  from  the  equally  mistaken  idea  that 
monopoly  of  capital  has  come  to  be  of  equal  or 
greater  social  importance  than  monopoly  of  land. 
But,  however  that  may  be,  let's  consider  our 
friend's  historical  argument 


CHAPTER  XV. 

Feudalism. 

We  have,  indeed,  passed  from  an  age  of  feudal- 
ism to  an  age  of  capitalism — from  an  age  in  which 
the  landlord  was  dominant,  to  one  in  which  the 
capitalist  is  dominant.  But  our  socialistic  friend 
loses  his  balance,  I  think,  over  the  essentials  of 
this  transition.  What  if  the  capitalist  has  dis- 
placed the  landlord?  Does  it  follow  that  the 
powers  which  may  he  incidental  to  capitalism  have 
superseded  the  powers  that  are  incidental  to 
landlordism?  I  think  not.  To  accept  such  rea- 
soning is  to  put  form  above  substance.  It  is  to 
regard  the  ephemeral  name  or  mask  of  landlord- 
ism as  more  vital  than  its  essential  power. 

In  the  feudal  period,  which  was  quite  distinctly 
an  age  of  landlordism,  there  were  no  capitalists  in 
the  modern  sense.  To  be  sure,  it  is  true  that  in 
the  free  commercial  cities  there  was  commercial 
capital  even  in  feudal  times,  and  a  degree  of 
capitalization  of  land  such  as  distinguishes  pres- 
ent day  capitalism.  But  those  cities  were  only 
capitalistic  pioneers,  mere  intruders  here  and 
there  into  the  vast  social  territory  over  which 
landlordism  held  undisputed  sway.  As  a  rule, 
the  landlord  class  was  the  ruling  class ;  the  work- 
ing class  was  the  dependent  class;  and  the  capi- 
talist class,  to  the  extent  that  there  was  one,  was 
a  toady  class.  You  know  the  "push"  that  so- 
ciety's uppertendom  of  today  contemptuously  calls 
"climbers."  Well,  the  capitalist  class  under  feu- 
dalism was  a  good  deal  of  the  same  breed — obse- 
quious to  their  "betters,"  the  landlord  clase,  and 


272  SOCIAL    SERVICE. 

insolent  to  their  "inferiors,"  the  working  class. 
Yet  they  were  the  germ  of  a  new  kind  9f  aris- 
tocracy which  is  only  now  coming  into  flower. 

Strictly  speaking,  there  were  only  two  social 
classes  in  feudal  times,  the  landlord  class  and 
the  working  class;  for  the  capitalists  were  work- 
ers as  well  as  "climbers," — workers  in  their  man- 
ufacturing and  commercial  pursuits,  and  "climb- 
ers" in  their  ambitions  for  power.  Landlord  and 
worker,  social  monarch  and  social  servitor — these 
alone  can  be  distinctly  classified  in  the  feudal 
regime,  both  as  to  their  economic  interests  and 
as  to  their  personality.  But  with  extensions  of 
personal  liberty,  the  working  class  evolved  capital- 
istic interests  which  encroached  more  and  more 
upon  feudalism.  Those  encroachments  are  trace- 
able, however,  to  no  such  economic  power  of  capi- 
tal monopoly  over  land  monopoly,  of  monopoly  of 
the  artificial  instruments  of  production  over  mon- 
opoly of  natural  instruments  of  production,  as 
our  socialistic  friend  infers.  There  was  no  sub- 
stitution for  land  monopoly  of  capital  monopoly. 
There  was  simply  a  commercial  absorption  of 
landlord  interests  by  capitalist  interests.  As  the 
landlord  class  under  feudalism  had  held  dominion 
over  the  labor  class,  including  what  there  then 
was  of  a  capitalist  class,  so  the  capitalist  claes 
has  come  under  capitalism  to  hold  dominion  over 
the  labor  class  and  what  there  is  left  of  the  land- 
lord class.  But  this  has  involved  no  shifting  of 
economic  power  from  the  natural  to  the  artificial 
instruments  of  production.  It  is  nothing  more 
than  a  shifting  of  the  ownership  of  the  natural 
instruments  of  production  from  a  landlord  class 
to  a  capitalist  class.  The  relative  power  of  land 
monopoly  and  capital  monopoly  remains  unal- 
tered. What  difference  ean  it  make  to  the  rest  of 
ns,  Doctor,  whether  landlordism  absorbs  owner- 
ship of  capital,  or  capitalism  absorbs  ownership 


FEUDALISM.  273 

of  land?  The  thing  that  really  concerns  us  is 
the  question  of  how  we  shall  most  easily  and 
most  effectively  dry  up  the  source  of  the  evil 
power  of  either. 

Our  friend  refers  to  capitalism,  you  recall,  as 
a  stage  in  the  progress  of  society  from  protoplasm 
to  perfection — or,  as  old  Judge  Stinson  used  to 
say  sometimes  when  he  struck  a  snag  in  a  farm 
survey,  "from  approximately  thence,  to 
there  or  thereabouts."  He  looks  back  to 
feudalism,  you  remember  also,  as  an  old  land- 
mark along  the  same  social  highway;  and  he  ac- 
counts for  it  as  an  evolution  from  what  I  shall 
have  to  call  the  personal  slavery  period,  for  I 
forget  the  name  he  uses.  His  history  of  this 
great  human  pilgrimage  is  all  right  in  the  main, 
I  suppose;  but  I  have  my  doubts  about  some  of 
his  interpretations,  haven't  you?  In  resolving 
our  doubts,  we  can't  go  back  to  protoplasm  quite 
as  confidently  as  our  friend  does,  in  the  simplic- 
ity of  his  materialistic  faith;  for  even  you,  my 
dear  Doctor,  with  all  your  tendency  to  agree  with 
his  philosophy  of  the  origin  of  things,  are  in- 
clined to  balk  at  some  of  his  inferences.  But  we 
may  in  our  minds  run  rapidly  along  the  path  of 
this  pilgrimage  from  the  point  at  which  it  de- 
bouches from  the  wilderness  of  scientific  con- 
jecture into  the  foggy  lowlands  of  history. 

No,  indeed,  I  guess  we  won't  try  to  settle  any 
of  the  disputes  of  the  historically  learned.  We 
won't  try  to  settle  anything.  We  won't  even  try 
to  be  profound.  We  will  merely  try  to  brush  up 
on  such  general  learning  as  can  be  obtained  from 
any  good  school  history.  The  trouble  with  people 
these  days  is  not  that  they  don't  know  enough  to 
consider  their  social  problems,  but  that  they  don't 
think  enough  about  what  they  know.  What  do 
we  find,  then,  as  we  glance  down  the  pathway  of 
economic  history? 


274  SOCIAL    SERVICE. 

Well,  leaving  out  the  protoplasmic  secrets  and 
the  mystical  Eidenic  era,  the  era  of  the  innocence 
of  ignorance,  we  confront  the  history  of  human 
progress  at  a  point  where  human  selfishness  had 
in  one  way  and  another  acquired  the  power  of 
getting  service  without  giving  service.  This  was 
apparently  done  at  first  by  subjugation  of  the 
person  direct;  for  slavery  is  one  of  the  earliest 
phenomena  of  which  we  have  historical  demon- 
stration. But  subjugation  of  the  person  indirect- 
ly by  means  of  land  monopoly  is  also  one  of  the 
earliest  devices  for  getting  without  giving.  These 
are  the  only  ways  of  making  slavery,  when  you 
get  down  to  the  last  analysis.  As  an  historical 
speculation  it  would  seem  that  land  monopoly 
must  have  been  secondary  in  point  of  time;  for 
you  can't  enslave  men  by  monopolizing  land, 
unless  you  monopolize  all  that  they  can  readily 
gain  access  to.  And  we  find  this  speculation  borne 
out  by  the  historical  fact  that  indirect  enslavement 
by  means  of  land  monopoly  has  existed  only  where 
land  was  scarce  relatively  to  its  desirability  for 
use.  Where  land  was  plentiful  relatively  to  its 
uses,  as  in  the  old  pastoral  regions,  enslavement 
by  direct  subjugation  of  the  person  was  the  only 
kind  of  servitude.  But  where  land  was  relatively 
scarce,  we  find  a  condition  of  landlessnees  gen- 
erating conditions  of  slavery. 

Only  the  other  day  I  was  reading  some  of 
Herbert  Spencer's  speculations  on  this  very  point. 
He  seems  to  think  that  in  the  human  make  up 
there  is  a  natural  sense  of  private  property  which 
relates  to  moveables  and  to  habitations,  and  that 
these  species  of  property  were  habitually  recog- 
nized in  primitive  society.  It  is  to  this  sense 
that  he  attributes  social  development.  From  a 
primitive  individual's  assertion  of  property  in  his 
moveables  and  structures,  comes  a  consciousness 
of  right  to  the  use  of  the  parts  of  the  earth  to 


FEUDALISM.  275 

which  moveables  and  structures  adhere.  Then 
comes  a  family  claim  to  localities,  which  develops 
into  a  patriarchal  claim  and  thence  into  com- 
munal claims.  By  communal  claims,  you  are  to 
understand  those  under  which  the  land  is  held  as 
common  property  by  all  its  occupants  except  per- 
sonal slaves.  It  may  he  occupied  and  worked 
individually — that  is,  private  possession  of  par- 
ticular sites  may  be  recognized, — but  the  common 
ownership,  if  I  understand  Spencer's  point,  is 
never  lost  sight  of.  If  the  occupant  departs,  he 
has  no  land  to  sell.  If  the  population  increases, 
new  apportionments  are  made. 

The  change  from  this  condition,  as  I  apprehend 
Spencer,  is  accounted  for  by  force.  This  seems 
to  be  the  only  adequate  cause — internal  or  ex- 
ternal force.  The  change,  that  is,  from  common 
ownership  to  individual  ownership  of  places  on 
the  planet,  is  to  be  accounted  for  as  slavery  is 
accounted  for.  Only  force  accounts  for  the  own- 
ership of  men;  only  force  can  account  for  the 
ownership  of  the  land  on  which  men  must  live  if 
they  live  at  all.  After  the  initial  force  of  con- 
quest, according  to  the  Spencerian  explanation, 
a  period  of  contract  sets  in  with  reference  to  land, 
precisely  as  it  does  with  reference  to  slavery. 
Land  ia  held  under  contract  of  trust,  as  in  some 
species  or  variations  of  feudalism;  or  under  con- 
tract of  ownership,  as  in  some  species  or  varia- 
tions of  capitalism.  The  force  in  which  slavery 
and  land  ownership  originated  is  thus  perpetuated 
by  internal  regulations  of  public  policy — by  what 
our  communist-anarchist  friend  over  the  way  de- 
nounces as  "government."  And  of  course  sel- 
fishness— personal  selfishness,  and  class  selfish- 
ness if  you  please, — perverts  the  contract.  If  it 
is  a  trust  contract  under  feudalism,  it  grows  into 
absolutism  and  comes  to  wear  a  halo  of  divine 
right;  if  it  is  an  ownership  contract  under  capi- 


276  SOCIAL    SERVICE. 

talism,  it  also  grows  into  absolutism  but  carries 
the  baton  of  business  might. 

Now,  Doctor,  we  may  see  all  this  working  out, 
I  think,  if  we  recall  our  studies,  such  as  they 
were,  of  European  history.  The  Roman  domin- 
ions were  conquests.  Part  of  the  lands  the  Ro- 
mans conquered  were  left  to  the  original  inhabi- 
tants; the  rest  were  taken  as  public  lands,  some 
of  which  were  cut  up  into  Roman  homesteads 
and  sold  or  rented,  the  rest  being  held  as  a  public 
domain  very  much  as  we  hold  the  great  unde- 
veloped West — I  mean,  as  we  used  to.  But  by 
internal  aggressions  the  common  lands  of  Rome 
came  to  be  largely  the  property  of  the  patricians. 
This  made  the  land  question  "the  eternal  ques- 
tion at  Rome."  Contractual  land  ownership  led 
to  land  monopoly  in  Rome  as  it  doubtless  had 
done  in  the  other  countries  of  antiquity,  and  as 
it  always  will  do  anywhere  unless  the  principle  of 
common  right  is  somehow  secured. 

Don't  the  land  laws  of  Moses  suggest  a  lesson 
he  had  probably  learned  at  the  Egyptian  court? 
Isn't  it  probable  that  patrician  ownership  of  land 
had  developed  in  Egypt  as  it  afterwards  did  in 
Rome,  and  that  Moses  saw  its  power?  It  is  dif- 
ficult in  any  other  way  to  explain  the  Jewish 
year  of  jubilee  with  reference  to  land — the  fiftieth 
year  of  ownership,  when  all  lands  were  to  revert 
to  their  original  possessors.  All  contractual  own- 
erships of  land  rested  upon  that  condition  of  re- 
version. Thus  the  principle  of  common  owner- 
ship was  recognized,  and  perpetual  monopoly  made 
practically  impossible.  You  don't  see  how?  Well, 
Milman,  the  historian,  saw  how.  In  his  history 
of  the  Jews,  Milman  describes  that  jubilee-year 
regulation  as  "a  singular  agrarian  law,  which 
maintained  the  general  equality,  and  effectually 
prevented  the  accumulation  of  large  masses  of 
property  in  one  family,  to  the  danger  of  the 


FEUDALISM.  277 

national  independence  and  the  establishment  of 
a  great  oligarchy."  These  Mosaic  contracts  of 
land  tenure  were  like  ground  leases,  with  a  term 
of  fifty  years;  they  were  not  like  deeds  of  own- 
ership to  endure  "while  grass  grows  and  water 
runs." 

But  it  was  the  Roman,  not  the  Jewish  system, 
that  prevailed.  For  while  it  was  a  maxim  of  the 
Koman  law,  as  it  is  of  our  law  in  most  jurisdic- 
tions, that  all  land  was  held  of  the  sovereign,  yet 
absolute  private  ownership  was  in  fact  the  rule 
with  the  old  Romans  ae  it  is  with  us.  And  I 
wish,  Doctor,  that  you  would  put  a  pin  in  right 
tkere,  af ainst  the  time  when  our  socialistic  friend 
lectures  us  again  upon  the  present  capitalistic 
system  as  something  new.  The  capitalistic  sys- 
tem is  limply  the  contract  system.  So  was  the 
Roman.  Rome  had  personal  slavery,  it  is  true; 
but  so  have  we  had  personal  slavery.  Rome  had 
landlordism  also;  but  it  was  landlordism  as  we 
have  it — the  ownership  of  land  as  a  commodity. 
The  ownership  of  land  in  Rome  was  in  practice 
allodial,  as  it  is  with  us.  If  there  is  any  dif- 
ference it  is  of  form  and  not  of  substance.  In 
our  time  capitalists  monopolize  capital  through 
monopoly  of  land,  thereby  enslaving  working- 
men;  whereas  in  Rome  it  was  landlords  that 
monopolized  capital.  In  addition  the  Romans 
owned  workingmen  as  commodities  precisely  as 
we  have  done  down  into  your  day  and  mine. 

But  I  have  no  special  desire  to  press  my  point 
that  the  social  pathway  runs  along  a  period  of 
ownership  contracts  into  the  feudal  period  of 
trust  contracts,  and  thence  to  another  period  of 
ownership  contracts  differing  from  the  Roman 
only  in  form  and  not  in  substance.  Although  I 
believe  this  to  be  true,  I  am  nevertheless  quite 
willing  to  disregard  it  and  accept  for  our  pur- 
poses our  socialistic  friend's  idea  of  a  personal 


278  SOCIAL    SERVICE. 

enslavement  period  (represented  by  Greece  and 
Kome),  giving  way  to  a  landlord  period  (repre- 
sented by  the  feudalism  of  the  Middle  Ages), 
which  has  during  the  past  five  centuries  or  so  been 
giving  way  to  a  period  of  capitalism.  So  let  us  jog 
along  our  pathway  of  social  progress  again. 

At  the  period  of  the  decline  of  Eome  the  sys- 
tem of  allodial  or  contractual  ownership  of  land 
was  almost  universal,  although  the  term  "allo- 
dial" did  not  come  into  vogue  until  needed  as 
an  antonym  to  "feudal."  Said  to  be  a  term  of 
the  Middle  Ages,  suggested  by  the  tribal  customs 
of  northern  Europe,  "allodial"  denominates  the 
tenure  of  absolute  property  in  land  as  distin- 
guished from  that  of  conditional  property  in  land. 

In  their  origin,  allodial  tenures  were  perpetual, 
transferable  and  inheritable,  and  were  subject  to 
no  conditions  whatever  but  the  bare  necessities 
of  public  defense.  But  in  time  there  came  to  be 
a  species  of  allodial  tenures  known  as  "fiscal 
lands,"  which  were  reserved  to  the  king,  who 
made  gifts  from  them  to  court  favorites.  These 
gifts — "benefices"  they  were  called — were  utilized 
by  the  beneficiaries  to  draw  power  unto  them- 
selves. They  carved  out  sub-gifts  for  their  own 
favorites — sub-tenancies,  as  we  should  call  them; 
sub-infeudations  as  they  were  called  in  those  days. 
By  sub-infeudation  the  under  tenants  declared 
allegiance  to  the  beneficiaries,  who  had  declared 
theirs  to  the  king;  and  in  this  manner  feudalism 
as  a  system  is  believed  to  have  originated.  The 
king  was  overlord,  but  the  beneficiaries  were 
lords — barons  with  subjects  of  their  own,  whose 
allegiance  was  not  to  the  king  but  to  them.  This 
had  the  effect  of  prostrating  the  authority  of  the 
king.  For  the  beneficiaries,  supported  by  their 
tenantry,  were  able  to  command  an  overwhelming 
military  force,  either  to  support  or  to  defy  him. 
And  they  added  to  their  power  by  forcing  all 


FEUDALISM.  279 

allodial  proprietors  into  their  service.  Through 
their  rapacity  they  had  created  a  reign  of  terror 
among  allodial  proprietors — something  like  that 
which  prevails  among  independent  business  men 
today  who  find  themselves  threatened  by  great 
trusts  and  who  join  the  trust  rather  than  be 
crushed  by  it.  So  the  terrorized  allodialists  glad- 
ly surrendered  their  allodial  holdings  on  condi- 
tion of  getting  them  back  as  feudal  tenures.  As 
the  military  compact  of  feudalism  between  land- 
lord and  tenant,  or  lord  and  vassal,  was  their 
only  hope  of  protection,  they  delivered  over  their 
lands  as  gracefully  as  Slim  Jim  Pulsifer  gave 
over  his  pocket  book  to  the  "hold-up"  man — de- 
livered them  to  the  powerful  lords,  and  received 
them  back  again  charged  with  the  feudal  con- 
tract. This  obligated  the  tenant  to  support  the 
lord,  and  the  lord  to  protect  the  tenant.  It  was 
a  contract  of  trust — don't  you  see  ? — in  contradis- 
tinction to  contracts  of  ownership. 

The  historical  circumstances  were  such,  how- 
ever, that  those  feudal  obligations  developed  a 
paternal  relationship  which  had  its  attractive  as 
well  as  its  repulsive  aspects  as  compared  with  the 
contractual  tie — whether  of  trust  or  of  absolute 
ownership — which  had  preceded  feudalism  and  has 
come  again.  Custom,  personal  attachment,  grati- 
tude, honor,  dread  of  penalization  and  infamy, 
cemented  by  the  sanctions  of  religion,  all  contrib- 
uted to  that  homogeneity  which  raised  feudalism 
to  the  level  of  a  social  system. 

As  a  political  institution,  Mr.  Bryce  defines 
feudalism — let  me  get  his  "Holy  Roman  Em- 
pire," and  quote.  Ah,  here  it  is  at  page  113.  He 
defines  feudalism  politically  as — 
the  system  which  made  the  owner  of  a  piece  of  land, 
whether  large  or  small,  the  sovereign  of  those  who 
dwelt  thereon;  an  annexation  oT  personal  to  territor- 
ial authority  more  familiar  to  Eastern  despotism  than 
to  the  free  races  of  primitive  Europe.  On  this  prin- 


JJ«0  SOCIAL,    SERVICE. 

ciple  were  founded,  and  by  It  are  explained,  fendal 
law  and  justice,  feudal  finance,  feudal  legislation, 
each  tenant  holding  toward  his  lord  the  position  which 
his  own  tenants  held  toward  himself.  And  it  is  just 
because  the  relation  was  so  uniform,  the  principle 
BO  comprehensive,  the  ruling  class  so  firmly  bound 
to  its  support,  that  feudalism  has  been  able  to  lay 
upon  society  that  grasp  which  the  struggles  of  more 
than  twenty  generations  hare  scarcely  shaken  off. 

But  all  powerful,  Doctor,  as  was  that  graap  in 
the  Eleventh  century,  and  slowly  as  society  has 
been  able  to  snake  it  off,  the  evidences  of  its  de- 
cline soon  after  the  Eleventh  century  are  quite 
obvious.  By  the  Fifteenth  century  new  social 
forces  had  greatly  reduced  its  power;  and  in  our 
day  there  are  few  feudal  remnants  except  in  our 
law  of  land  tenures,  and  not  so  very  many  there. 
Feudalism  has  been  almost  completely  superseded 
by  capitalism. 


CHAPTER  XVI. 

Capitalism. 

The  extinction  of  feudalism  was  princi- 
pally due,  I  suppose,  to  influences  incident  to 
the  return  of  kingly  power,  chief  among  them 
being  the  enfranchisement  of  towns  and  cities. 
Charters  from  the  sovereign  authority,  conferring 
more  or  less  freedom  upon  towns  and  cities,  gave 
economic  potency  to  manufacturers  and  mer- 
chants, and  this  was  the  beginning  of  capitalism. 

Remembering  that  we  should  probably  speak 
upon  that  subject  to-day,  Doctor,  I  have  brought 
with  me  a  couple  of  volumes  of  Green's  "History 
of  the  English  People,"  for  I  want  to  read  you  one 
or  two  observations  on  this  phase  of  the  transi- 
tion from  feudalism  to  capitalism.  Here  at  page 
150  of  the  first  volume,  in  the  middle  of  chapter  i 
of  book  iii,  Green  writes  what  I  shall  read  you 
now: 

Whenever  we  get  a  glimpse  of  the  inner  history 
of  an  English  town,  we  find  the  same  peaceful  revo- 
lution in  progress,  services  disappearing  through 
disuse  or  omission  while  privileges  and  immunities 
are  being  purchased  in  hard  cash. 

That  was  early  in  the  Thirteenth  century.  In 
the  second  volume,  writing  of  the  latter  half  of 
the  Fifteenth  century,  Green  tells  of  the  way  in 
which  the  merchant  and  manufacturing  classes  of 
the  enfranchised  towns  invested  the  surplus 
wealth  which  their  release  from  feudal  obliga- 
tions, followed  by  a  business  boom  such  as  we  of 
this  generation  may  easily  understand,  had 
brought  them  so  abundantly.  They  began  buy- 
ing out  landlords. 


282  SOCIAL    SERVICE. 

But  this  was  not  for  the  purpose,  as  a  rule, 
of  joining  the  landlord  class.  They  did  it  for  the 
purpose  of  securing  industrial  freedom  and  pow- 
er for  themselves  as  capitalists.  These  later  and 
larger  acquisitions  of  land  by  capitalists  from 
landlords  for  business  purposes,  were  not  unlike 
the  purchases  of  privileges  and  immunities  under 
feudalism  at  the  very  beginning  of  its  decline — 
those  purchases,  you  recall,  by  which  tenants  com- 
muted their  feudal  obligations  of  service  to  land- 
lords with  money  payments  or  money  obligations. 
In  a  somewhat  analogous  way,  capitalistic  busi- 
ness men  freed  their  businesses  from  feudal  bur- 
dens by  buying  out  landlords  at  capitalized  rates. 
When  they  had  done  so  they  included  in  their  in- 
ventories of  capital  the  land  they  bought. 

You  see  they  were  not  governed  by  sentiment. 
Perhaps  they  were  not  governed  even  by  expecta- 
tions of  profit  from  the  land.  They  wanted  to 
use  the  land  in  their  capitalistic  business  as  man- 
ufacturers or  merchants,  and  that  was  all.  But 
"business  is  business,"  don't  you  know?  and  with 
reference  to  these  lands  there  was  no  more  pater- 
nalism, no  more  of  the  idyllic  personal  relation- 
ships of  feudal  landlord  and  tenant,  after  capital- 
ists came  into  possession.  As  land  began  to  be 
capitalized  as  an  instrument  of  production,  its 
economic  power  caught  the  capitalistic  imagina- 
tion, and  its  price  went  up  in  leaps  and  bounds, — 
just  as  it  has  done  under  present-day  capitalism 
in  New  York  and  Chicago  and  every  other  place 
of  booming  business.  Please  listen  to  this  refer- 
ence to  the  merchant  classes  of  1461-1485,  by 
Green  at  page  20  of  my  second  volume  early  in 
chapter  i  of  his  book  v: 

They  began  to  invest  largely  in  land,  and  these 
"farming  gentlemen  and  clerking  knights,"  as  Lati- 
mer  bitterly  styled  them,  were  restrained  by  few  tra- 
ditions or  associations  in  their  eviction  of  the  small- 


CAPITALISM.  283 

er  tenants.  The  land,  indeed,  had  been  greatly  un- 
derlet, and  as  its  value  rose  with  the  peace  and  firm 
government  of  the  early  Tudors,  the  temptation  to 
raise  the  customary  rents  became  irresistible.  "That 
which  went  heretofore  for  £20  or  £40  a  year,"  we 
learn  in  Henry  the  Eighth's  day,  "now  is  let  for  £50 
or  £100."  But  it  had  been  only  by  this  low  scale 
of  rent  that  the  small  yeomanry  class  had  been  en- 
abled to  exist.  "My  father,"  says  Latimer,  "was  a 
yeoman,  and  had  no  lands  of  his  own;  only  he  had 
a  farm  of  £3  or  £4  by  the  year  at  the  uttermost, 
and  hereupon  he  tilled  so  much  as  kept  half  a  dozen 
men.  He  had  walk  for  100  sheep,  and  my  mother 
milked  thirty  kine;  he  was  able  and  did  find  the  king 
a  harness  with  himself  and  his  horse  while  he  came 
to  the  place  that  he  should  receive  the  king's  wages. 
I  can  remember  that  I  buckled  his  harness  when  he 
went  to  Blackheath  field.  He  kept  me  to  school;  he 
married  my  sisters  with  £5  apiece,  so  that  he 
brought  them  up  in  godliness  and  fear  of  God.  He 
kept  hospitality  for  his  poor  neighbors,  and  some 
alms  he  gave  to  the  poor,  and  all  this  he  did  of  the 
same  farm  where  he  that  now  hath  it  payeth  £16  by 
year,  or  more,  and  is  not  able  to  do  anything  for  his 
Prince,  for  himself,  nor  for  his  children,  or  give  a 
cup  of  drink  to  the  poor."  Increase  of  rent  ended 
with  such  tenants  in  the  relinquishment  of  their 
holdings,  but  the  bitterness  of  the  ejections  which 
the  new  system  of  cultivation  necessitated  was  in- 
creased by  the  iniquitous  means  that  were  often  em- 
ployed to  bring  them  about.  The  farmers,  if  we  be- 
lieve More,  in  1515,  were  "got  rid  of  either  by  fraud 
or  force,  or  tired  out  with  repeated  wrongs  into  part- 
ing with  their  property."  "In  this  way  it  comes  to 
pass  that  these  poor  wretches,  men,  women,  hus- 
bands; orphans,  widows,  parents  with  little  children, 
households  greater  in  number  than  in  wealth  (for 
arable  farming  requires  many  hands,  while  one  shep- 
herd and  herdsman  will  suffice  for  a  pasture  farm), 
all  these  emigrate  from  their  native  fields  without 
knowing  where  to  go."  The  sale  of  their  scanty 
household  stuff  drove  them  to  wander  homeless 
a',  ad,  to  be  thrown  into  prison  as  vagabonds,  to 
beg  and  to  steal.  Yet  in  the  face  of  such  a  spectacle 
as  this,  we  still  find  the  old  complaint  of  scarcity  of 
labor  and  the  old  legal  remedy  for  it  In  a  fixed  scale 
of  wages.  The  social  disorder,  in  fact,  baffled  the 
sagacity  of  English  statesmen,  and  they  could  find  no 


284  SOCIAL    SERVICE. 

better  remedy  for  it  than  laws  against  the  further 
extension  of  sheep  farms,  and  a  formidable  increase 
of  public  executions.  Both  were  alike  fruitless.  Ill- 
closure  and  evictions  went  on  as  before  and  swelled 
the  numbers  and  the  turbulence  of  the  floating  labor 
class.  The  riots  against  "inclosures"  of  which  we 
first  hear  in  the  time  of  Henry  the  Sixth,  and  which 
became  a  constant  feature  of  the  Tudor  period,  are 
indications  not  only  of  a  perpetual  strife  going  on  in 
every  quarter  between  the  landowners  and  the  small- 
er peasant  class,  but  of  a  mass  of  social  discontent 
which  was  to  seek  constant  outlets  in  violence  and 
revolution.  And  into  this  mass  of  disorder  the  break- 
up of  the  military  households  and  the  return  of 
wounded  and  disabled  soldiers  from  the  wars  intro- 
duced a  dangerous  leaven  of  outrage  and  crime.  Eng- 
land for  the  first  time  saw  a  distinct  criminal  class 
in  the  organized  gangs  of  robbers  which  began  to 
infest  the  roads  and  we  e  always  ready  to  gather 
round  the  standard  of  revolt.  The  gallows  did  their 
work  in  vain.  "If  you  do  not  remedy  the  evils  which 
produce  thieves,"  More  urged  with  bitter  truth,  "the 
rigorous  execution  of  justice  in  punishing  thieves 
will  be  vain."  .  .  .  Throughout  the  time  of  the 
Tudors  the  discontent  of  the  labor  class  bound  the 
wealthier  classes  to  the  crown.  It  was  in  truth  this 
social  danger  which  lay  at  the  root  of  the  Tudor 
despotism.  For  the  proprietary  classes  the  repres- 
sion of  the  poor  was  a  question  of  life  and  death. 
Employer  and  proprietor  were  ready  to  surrender 
freedom  into  the  hands  of  the  one  power  which 
could  preserve  them  from  social  anarchy.  It  was  to 
the  selfish  panic  of  the  land  owners  that  England 
owed  the  Statute  of  Laborers  and  its  terrible  heri- 
tage of  pauperism.  It  was  to  the  selfish  panic  of 
both  land  owner  and  merchant  that  she  owed  the 
despotism  of  the  monarchy.  The  most  fatal  effect 
of  this  panic,  of  this  passion  for  "order,"  was  seen  in 
the  striving  of  these  classes  after  special  privileges 
which  the  crown  alone  could  bestow. 

Doesn't  that  read  like  a  description  of  pres- 
ent day  conditions,  Doctor, — all  except  the  an- 
tique flavor  and  a  few  variations  of  incident?  Yet 
it  was  written  a  generation  ago,  of  a  period  al- 
most 500  years  before,  and  by  an  historical  scholar 
of  the  highest  rank,  who  had  no  other  thought 


CAPITALISM.  285 

than  to  tell  in  a  true  way  a  true  story  of  the  peo- 
ple of  that  distant  past. 

Just  observe  how  they  made  paupers  and  crim- 
inals in  those  days.  We  do  it  now,  only  our  raw 
material  for  it  is  the  mechanic  and  the  day  la- 
borer more  notably  than  the  farmer  and  the  peas- 
ant. They  enclosed  the  common  lands  then  for  the 
benefit  of  parasitical  classes;  and  what  have  we 
been  doing  but  that  for  a  hundred  years  with  our 
public  domain?  Aren't  we  doing  it  yet?  They 
were  trying  then,  as  we  are  now,  to  stop  crime 
by  rigorously  punishing  criminals  instead  of  re- 
forming the  social  maladjustments  that  produced 
them.  And  they  were  legislating  against  the  ex- 
tension of  sheep  farms  with  the  same  superficial 
statesmanship  in  those  days  that  we  legislate  on 
railroad  rates  and  business  trusts  in  our  day. 
Business  plutocrat  and  aristocratic  landlord,  then 
two  distinct  classes,  were  ready  to  surrender  their 
freedom  to  a  strong  monarchy  in  order  to  keep 
down  the  poor  whose  poverty  their  own  privileges 
were  making;  business  plutocrat  now,  with  land 
monopoly  for  his  basic  capital  and  his  all-con- 
quering industrial  weapon — two  classes  rolled  in- 
to one — is  clamoring  for  despotic  laws  in  order  to 
put  down  what  he  is  pleased  to  call  "anarchy,"  as 
they  of  500  years  ago,  by  the  way,  were  pleased 
to  call  it  "lollardism."  As  the  privileged  classes 
of  that  day  were  in  a  selfish  panic  of  fear  of  their 
impoverished  victims,  so  are  the  privileged  class- 
es of  our  day;  and  as  those  strove  eagerly  for 
more  special  privileges,  so  do  these.  Above  this 
din  of  clashing  classes,  moreover,  there  came  hys- 
terical screams  from  the  privileged  for  "order",  as 
from  the  like  classes  just  such  frantic  demonstra- 
tions come  now.  In  those  faraway  times,  Doc- 
tor, as  in  our  own  times,  there  seems  to  have  been 
a  very  passion  for  "law  and  order"  among  the 
classes  to  whom  the  law  never  has  any  sanctity  ex- 


286  SOCIAL    SERVICE. 

cept  as  it  serves  them,  nor  order  any  law  but  their 
own  unbridled  will. 

Our  socialistic  friend  often  assures  us  that  the 
industrial  phenomena  of  capitalism  are  very  mod- 
ern, don't  you  remember?  He  seems  to  think 
that  the  invention  of  steam  power  brought  on  a 
social  revolution.  But  if  history  reveals  any  es- 
sential difference,  between  the  industrial  changes 
which  steam  has  wrought  in  the  past  100  years, 
and  those  which  began  400  years  before,  I  have 
failed  to  find  it  in  the  course  of  my  untutored 
reading.  Surely  that  quotation  from  Green,  which 
is  quite  typical  by  the  way,  very  clearly  indicates 
that  there  are  no  differences  between  the  indus- 
trial phenomena  of  the  present,  and  those  of  the 
feudal  period,  except  differences  in  outward  form. 
Industrial  evils  so  familiar  to  us  of  this  day  did 
not  await  the  advent  of  steam  and  great  machin- 
ery. And  they  were  not  unique  in  England. 
That  country  was  in  the  same  economic  pathway 
in  which  all  were  traveling.  Industrial  evils  of 
the  capitalistic  type  appear  to  have  begun  every- 
where with  the  capitalization  of  land;  that  is,  if 
you  will  let  me  coin  an  awkward  word,  with  its 
"businessification." 

The  landlord  class,  demoralized  by  the  Cru- 
sades, were  compelled  to  break  up  their  feudal 
domains  into  parcels  and  sell  them,  and  business 
men  bought.  And  not  only  did  the  Crusades  in 
that  way  release  feudalized  land  to  capitalization, 
but  they  contributed  to  that  prosperity  of  the 
business  or  trading  interests  which  enabled  the 
business  classes  to  buy  land.  For  Crusaders 
brought  from  the  East  the  knowledge  of  many 
products  and  processes  tending  to  promote  manu- 
factures ;  and  it  was  during  these  expeditions  that 
modern  commerce  took  a  leap  forward.  As  the 
Italian  maritime  states  supplied  the  crusaders 
with  transports  and  conveyed  to  them  stores  and 


CAPITALISM.  287 

munitions  of  war,  there  was  a  rapid  increase  in 
the  navigation  of  the  Mediterranean,  which  had 
originated  in  the  trade  that  sprang  up  from  the 
free  towns  I  have  alluded  to.  There  does  not  ap- 
pear to  have  been  any  considerable  manufactur- 
ing, you  know,  from  about  the  Fifth  to  the  Elev- 
enth century.  Everything  had  to  be  made  "on 
the  place,"  as  we  used  to  say  out  at  our  old  farm. 
Even  kings  had  their  clothing  made  on  their 
farms  in  the  Ninth  century.  If  there  had  been 
any  tendency  toward  general  manufacturing,  it 
would  have  been  nipped  in  the  bud — yes,  you  may 
take  another  metaphor  if  you  want  to — by  ob- 
structions to  general  trade.  The  raids  of  feudal 
ma'rauders  of  the  lawless  type  made  merchandis- 
ing very  hazardous,  and  the  highway  and  market 
tariffs  of  feudal  marauders  of  the  "law  and  or- 
der" type,  made  it  burdensome.  In  this  state  of 
society  the  self-governing  Roman  towns  that  sur- 
vived the  shock  of  the  Teutonic  invasion  were 
capitalistic  oases  in  a  feudal  desert. 

Feudalism  itself  gradually  created  similar  self- 
governing  communities,  especially  in  Germany 
and  Italy,  through  kings'  charters  to  towns  and 
boroughs;  and  the  old  ones  won  back  something 
of  their  former  freedom.  One  of  the  first  signs  of 
advancing  civilization,  as  it  was  one  of  the  great 
agencies  of  progress,  was  the  growth  of  these 
towns.  Their  importance  historically  is  said  to 
date  from  the  union  of  about  80  of  the  most  im- 
portant German  towns,  along  somewhere  in  the 
Thirteenth  century.  This  union  was  called  the 
Hanseatic  League,  you  know,  and  was  organized 
for  mutual  defense  against  piracy  by  sea,  pillage 
by  land,  and  the  exactions  of  feudal  lords.  A 
similar  league,  the  Lombard,  from  which  Genoa 
and  Venice  date  their  natality  as  city  republics, 
had  been  organized  in  Italy  some  two  hundred 
years  earlier.  Now  what  I  ask  you  especially  to 


288  SOCIAL    SERVICE. 

reflect  upon,  Doctor,  with  reference  to  this  ad- 
vent of  capitalism,  is  the  fact  that  although  steam 
had  not  been  discovered  and  there  was  no  great 
machinery,  yet  the  industrial  evils  were  essen- 
tially the  same  as  now.  We  are  living  under  a 
capitalistic  system  which  does  indeed  differ  in 
many  outward  forms  from  that  of  half  a  thous- 
and years  ago,  which  is  indeed  much  farther  ad- 
vanced, and  which  does  therefore  express  itself 
with  greater  intensity  and  subtlety.  But  it  is  the 
same  system  and  not  a  new  one.  It  is  an  evolu- 
tion and  not  a  revolution.  It  manifests  a  differ- 
ence in  degree  and  not  a  difference  in  kind. 

The  truth  is,  Doctor,  that  capitalism  is  the 
natural  mode  of  trade,  and  its  phenomena  had  to 
appear  with  the  development  of  trade.  Our  friend 
agrees,  I  think,  that  these  historical  manifesta- 
tions were  inevitable.  He  and  I  probably  have 
no  quarrel  there.  Where  we  come  in  conflict  is 
over  his  insistence  upon  regarding  capitalism  it- 
self as  an  evil  and  a  back  number  now.  He  dis- 
regards the  fact,  which  I  insist  upon,  that  capital- 
ism is  not  a  bad  system  essentially,  but  that  it  is  a 
sick  system — a  system  sick  from  the  poisonous  de- 
coctions of  landlordism  and  other  special  priv- 
ileges with  which  it  was  "doped"  by  the  business 
men  of  the  feudal  period.  Capitalism  may  die 
from  this  sickness.  It  will  die  from  it  unless  it 
is  purged  of  the  poison  of  land  monopoly. 

I  fully  agree,  you  understand,  that  capitalism 
has  superseded  feudalism,  and  that  the  capitalist 
class  has  superseded  the  landlord  class.  What  I 
wish  to  emphasize  is  precisely  that  fact,  the  fact 
that  the  one  has  superseded  the  other — only  super- 
seded. I  insist  that  this  change  has  not  essentially 
altered  the  balance  of  power  in  industry.  The 
spirit  of  landlordism,  its  essence  and  its  coercive 
power,  survive  supreme.  The  only  difference  is 
that  the  capitalist  has  acquired  the  power  of  the 


CAPITALISM.  289 

landlord.  This  power  has  passed  from  autocratic 
administration  by  a  personal  class,  to  automatic 
administration  by  the  interplay  of  financial  inter- 
ests. No  longer  personal,  it  is  capitalized;  no 
longer  feudalistic,  it  is  businessistic.  The  cap- 
italization of  the  planet  is  in  our  day  what  its 
feudalization  was  in  the  palmy  days  of  land- 
lordism. 

The  tendency  toward  the  transfer  of  planet 
monopoly  from  landlord  classes  to  capitalistic  in- 
terests, and  the  consequent  rise  of  capitalism  out 
of  the  ashes  of  feudalism,  was  greatly  accelerated 
by  the  discovery  of  "new  worlds"  to  the  west- 
ward. Although  landlordism  crossed  the  At- 
lantic, feudalism  was  already  declining,  and  the 
conditions  over  here  were  unfavorable  to  its  re- 
vival. A  landlord  class  did  develop;  but  the 
primitive  environments  were  too  uncongenial  for 
it  to  flourish.  For  landed  interests  distinctively, 
there  was  little  room  in  all  this  broad  expanse  of 
unappropriated  country.  It  was  quite  impossible 
to  monopolize  land  to  the  degree  necessary  to 
coerce  labor.  Land  monopoly  was  consequently 
unprofitable;  labor  alone  could  flourish.  But  as 
labor  flourished,  it  developed  business  interests, 
germs  of  capitalism  such  as  the  progress  of  free- 
dom in  feudalistic  countries  had  already  de- 
veloped there.  These  interests  absorbed  landed 
interests,  not  by  buying  out  feudal  landlords,  as 
in  the  old  world,  but  by  taking  up  land  for  use 
and  then  dealing  with  it  upon  the  business  or  cap- 
italistic basis.  It  was  regarded  from  the  start  as 
an  instrument  of  production  indistinguishable 
from  all  others,  and  interchangeable  with  all  oth- 
ers by  the  same  measurements  of  value.  And  as 
in  the  Americas  so  in  the  Australias.  Whereas 
in  the  old  world,  capitalism  came  in  as  a  transi- 
tion from  feudalism,  in  all  the  new  worlds  it  was 
a  phenomenon  of  first  intention.  But  the  eco- 


290  SOCIAL    SERVICE. 

nomic  effect,  everywhere  the  same,  was  to  lodge  in 
capitalism  the  essential  power  of  landlordism — 
monopoly  of  the  natural  instruments  of  produc- 
tion. 

So  the  evil  principle  of  landlordism  was  not 
destroyed  by  capitalism,  nor  any  new  principle  of 
evil  created.  It  simply  acquired  a  new  economic 
habit,  and  greater  potency  through  greater  sub- 
tlety of  operation.  From  the  social  service  en- 
vironment of  a  barbaric  paternalism,  it  passed 
into  a  social  service  environment  of  business  con- 
quest. For  the  limited  potency  of  arbitrary  regu- 
lation according  to  personal  circumstance  and 
whim,  it  acquired  the  impersonal  and  rigid  po- 
tency of  competitive  regulation.  The  family  as- 
sociation, personal  affection,  gratitude,  loyalty, 
and  noblesse  oblige,  which  governed  the  relation 
of  landlord  and  tenant  under  feudalism,  gave  way 
under  capitalism  to  the  impersonal  commercial 
rule  of  "business  is  business,"  and  business  exacts 
"all  the  traffic  will  bear."  Ownership  of  the 
great  natural  instrument  of  production,  the  plan- 
et itself,  had  been  coaxed  away  from  the  landlord 
class,  and  had  come  within  the  capitalistic  sphere 
of  influence  and  under  the  capitalistic  mode  of 
administration.  Land  as  well  as  capital  was  cap- 
italized— the  planet  as  well  as  products  from  the 
planet.  Becoming  less  and  less  a  subject  of  fami- 
ly heritage,  it  had  come  to  be  more  and  more  a 
commercial  commodity. 

At  last,  when  the  feudal  period  closed,  land 
had  lost  its  distinctive  character  in  the  capitalist- 
ic mind.  Although  a  natural  instrument  of  pro- 
duction, the  same  as  before,  and  as  different  es- 
sentially as  ever  from  artificial  instruments  of 
production,  it  came  now  to  be  dealt  in  and 
thought  of  as  a  commodity,  identical  with  artifi- 
cial instruments.  Not  only  is  land  still  useful, 
and  useful  in  greater  degree,  far  greater  degree 


CAPITALISM.  291 

than  ever,  but  it  has  become  saleable  as  a  com- 
modity. That  was  not  always  so,  you  see.  Land 
was  not  a  commodity  in  feudal  times.  It  was  not 
an  article  of  commerce.  It  was  not  capitalized. 
Aiid  this  is  what  makes  our  socialistic  friend 
think,  I  take  it,  that  the  evolution  from  feudalism 
to  capitalism  was  a  fundamental  or  revolutionary 
change.  It  was  in  fact  not  fundamental.  It  was 
only  a  change  in  form,  a  change  of  owners,  a 
change  from  ownership  of  land  by  lords  to  owner- 
ship of  land  by  traders. 

When  capitalism  reached  out  for  land  as  a  com- 
modity in  trade,  along  with  products,  away  back 
in  those  feudal  centuries,  it  produced  then  the 
same  industrial  evils,  although  steam  and  big  ma- 
chinery were  unknown,  that  it  produces  now,  in 
this  era  of  great  machinery  with  land  treated  as 
one  of  the  capitalized  instruments  of  production. 
The  explanation  of  these  evils  is  surely  not  mo- 
nopoly of  machinery  in  itself,  but  monoply  of  the 
natural  instruments  of  production — the  same  in 
kind  even  if  different  in  form  as  the  feudal  mo- 
nopoly. The  monopoly  of  land  is  the  underlying 
monopoly  which  makes  most  others  possible,  and 
without  which  all  others  would  either  wither  or 
be  easily  pulled  up  by  the  roots. 

Think  it  over,  Doctor.  Under  landlordism  the 
landlord  is  a  person  apart,  who  exacts  as  rental 
the  fruits  of  the  land — one  out  of  three  of  the 
nettles  the  widow  gathers  for  her  frugal  meal,  as 
Carlyle  puts  it.  He  may  take  more;  he  may  take 
less.  He  may  even  forbid  the  use  of  his  land  if  it 
pleases  him.  His  whim  governs,  be  it  good  or 
bad.  But  under  capitalism,  this  power  of  rent 
exaction  is  capitalized.  The  land  itself  become* 
an  object  of  capitalistic  commerce.  The  rent  is 
all  the  traffic  will  bear,  and  hope  of  greater  profit 
may  result  in  forbidding  even  its  use.  Whim  and 
caprice  give  way  to  business  principles;  but  the 


292  SOCIAL    SERVICE. 

difference  is  not  essential.  The  planet  is  still  one 
thing  and  capital  another.  The  planet  is  still  the 
natural  instrument  of  production  from  which  all 
artificial  instruments  are  drawn.  The  planet  is 
the  instrument  which  is  not  only  indispensable  to 
social  life,  as  are  artificial  instruments,  but  it  is 
also  not  reproducible,  whereas  artificial  instru- 
ments are  reproducible.  Given  diversified  labor 
and  the  planet,  with  unobstructed  access  by  the 
}ne  to  the  other,  and,  with  unobstructed  trade,  arti- 
ficial instruments  result  in  abundance  under  capi- 
talism. Their  monopolization  in  those  circum- 
stances is  impossible.  But  obstruct  trade,  or  ob- 
struct access  to  the  planet  for  use,  and  you  pro- 
duce monopoly  of  capitalized  artificial  instru- 
ments and  monopoly  of  capitalistic  markets. 
Whether  you  obstruct  access  to  the  planet  by 
feudalistic  command  over  it,  or  by  capitalistic 
commerce  in  it,  makes  no  difference. 

"Wage  slaves!"  To  be  sure  there  are  wage 
slaves  under  capitalism.  Wage  slavery  and  chat- 
tel slavery  are  the  typical  forms  of  slavery  under 
capitalism,  as  serf  slavery  is  under  feudalism. 
The  chattel  slave  is  appropriated  as  property  and 
capitalized  as  a  commodity.  This  has  been  rejected 
for  the  more  profitable  form  of  capitalistic  slavery 
— wage  slavery.  The  product  of  the  wage  slave, 
not  the  man  himself,  is  appropriated.  The  slave 
himself  is  nominally  free.  His  products  are  ap- 
propriated by  means  of  nominally  voluntary  con- 
tracts of  service.  But  in  fact  these  contracts  are 
not  voluntary.  They  do  not  rest  on  a  square  deal. 
They  are  made  under  circumstances  which  force 
the  wage  worker  to  take  less  service  than  he  gives. 
They  are  destructive  of  the  principle  of  service 
for  service.  Not  because  they  are  wage  contracts, 
but  because  the  wage-worker  makes  them 
at  a  disadvantage.  The  man  is  not  free 
in  making  his  contract.  He  must  accept 


CAPITALISM.  293 

proffered  terms  or  starve.  For  all  the  in- 
struments of  production  are  monopolized  by  capi- 
talists, and  it  is  with  capitalists  that  he  makes  hia 
disadvantageous  contract.  If  he  organizes,  so  do 
they;  and  his  organization  is  less  powerful  than 
theirs,  for  they  control  the  instruments  of  produc- 
tion— all  the  instruments  of  production. 

But  when  you  analyze  the  matter,  Doctor,  you 
find  that  capitalists  control  all  the  instruments 
of  production  only  because  they  control  the  nat- 
ural ones,  those  which  are  indispensable  and  un- 
reproducible,  this  whirling  planet  on  which  we 
swing  through  space.  Since  land  is  capitalized, 
capitalism  takes  its  rents  and  labor  must  lose  them. 
Worse  than  that,  since  land  is  capitalized,  capital- 
ism makes  a  "closed  shop"  of  unused  spaces. 
Those  that  are  far  away  are  closed  to  labor  anyhow 
by  their  physical  inaccessibility.  Those  that  are 
near  by  are  closed  by  their  financial  inaccessi- 
bility, by  excessive  values  caused  by  capitalistic 
speculation  in  land. 

Under  feudalism,  the  natural  instruments  alone 
were  monopolized.  This  sufficed  to  subjugate  all 
producers.  They  could  not  use  any  land  without 
the  lord's  consent.  But  under  capitalism  these 
natural  instruments,  being  capitalized  along  with 
the  artificial  instruments,  are  subject  to  natural 
laws  of  trade.  These  laws  of  trade  operate  benefi- 
cially in  so  far  as  they  govern  the  ownership 
of  artificial  capital,  but  prejudicially  as  applied  to 
capitalistic  land  owning.  The  lord  under  feudal- 
ism could  deny  the  use  of  the  planet  arbitrarily  by 
mere  command;  capitalism  denies  it  through  the 
land  market  and  by  operation  of  competitive 
forces.  Under  feudalism  the  conflict  of  intereeti 
was  coincident  with  such  class  divisions  as  land- 
lord, tenant,  serf;  under  capitalism,  inclusive  of 
land  capitalism  of  course,  the  normal  identity  of 
business  interests  with  labor  interests  is  disturbed 


294  SOCIAL    SERVICE. 

by  the  abnormal  identity  of  business  interests  with 
landed  interests. 

What  good  sense  demands  of  us,  Doctor,  is  that 
we  somehow  disentangle  this  confusion.  We  must 
bring  into  co-operative  relations  the  business  in- 
terests that  are  identical  with  labor  interests,  and 
get  rid  altogether  of  the  business  interests  that  are 
inimical  to  labor  interests.  And  in  order  to  do 
this,  what  we  need  to  understand  is  that  land  capi- 
talism is  only  the  modern  form  of  feudal  landlord- 
ism. 

We  must  indeed  recognize  with  our  socialistic 
friend  the  fact  that  feudalism  has  passed  away, 
and  that  we  are  living  now  under  a  regime  of 
capitalism;  but  we  must  be  cautious  not  to  lose 
sight  of  the  other  fact,  that  capitalism  includes  in 
two  categories  what  feudalism  had  three  categories 
for.  Feudalism  had  natural  instruments,  artificial 
instruments,  and  workers  in  three  distinct  cate- 
gories ;  and  the  landlord  governed  all.  Why  ?  Be- 
cause he  owned  the  first.  Capitalism  now  has  ar- 
tificial and  natural  capital  in  one  category  and 
workers  in  the  other.  So  the  capitalist  governs  all. 
Why  ?  Merely  because  he  owns  the  first.  Through 
capitalization  of  land,  capitalists  have  acquired  the 
power  of  feudal  landlords — that  power  of  coercing 
labor  which  resides  nowhere  outside  of  personal 
enslavement  but  in  dominion  over  the  natural,  as 
distinguished  from  the  artificial,  instruments  of 
production. 


CHAPTER  XVII. 
Earl  Marx  and  Henry  George. 

At  our  last  two  or  three  talks,  Doctor,  we  spoke 
of  the  habit  of  confusing  natural  instru- 
ments of  production  with  artificial  instru- 
ments, as  if  they  were  essentially  alike  because 
they  are  capitalistically  interchangeable.  And  in 
that  connection  we  spoke  also  of  the  historical 
transition  from  feudalism  to  capitalism.  We 
were  pretty  well  agreed,  I  guess,  that  most  busi- 
ness men,  as  well  as  our  socialistic  friend  down 
the  street,  not  to  mention  our  anarchist-com- 
munist neighbor  over  the  way,  fail  to  appreciate 
the  fundamental  and  unchangeable  difference  be- 
tween those  two  instruments  of  social  service — 
the  natural  and  the  artificial.  They  have  grown 
up  with  a  mental  habit  of  regarding  both,  when 
immersed  in  their  interchangeable  capitalized 
values,  as  possessing  no  differentiating  character- 
istics. In  business  thought,  capital  is  simply 
value,  expressible  with  figures  and  money  symbols 
on  the  pages  of  a  ledger.  Whether  the  value  be 
of  an  artificial  product  of  human  labor,  drawn 
with  pain  and  sweat  from  the  natural  opportuni- 
ties of  the  planet — "back-ache  value,"  as  John  Z. 
White  cells  it,  you  remember;  or  of  those  nat- 
ural opportunities  themselves;  or  of  the  human 
laborer  himself,  makes  no  difference  to  men  of 
th«  buiinaes  type.  Each  being  tradeable  for  the 
othw  on  a  common  basis  of  value,  each  is  capital 
to  the  capitalist  if  he  needs  it  in  his  business. 

Following  this  capitalistic  line  of  thought,  our 
Socialistic  friend  also  loses  sight  of  the  under- 


296  SOCIAL    SERVICE. 

lying  distinction  between  artificial  and  natural  in- 
struments of  production,  and  all  appreciation  of 
the  difference  in  the  natural  laws  that  govern 
their  respective  social  uses.  Or,  if  he  doesn't 
lose  sight  of  the  distinction,  he  sees  it  vaguely 
as  the  man  whose  sight  was  restored  saw  men  at 
first  as  trees  walking.  Yet  these  essential  differ- 
ences persist,  and  they  produce  characteristic  ef- 
fects. And  this  they  do,  as  I  have  indicated 
and  shall  try  to  show  you  further,  whether  the 
land  is  used  under  feudalism,  with  its  distinct 
personal  landlord  class,  or  under  capitalism,  where 
class  personality  gives  way  to  an  impersonal  land- 
ed interest  masked  behind  the  capitalistic  mode 
of  indiscriminate  capitalization.  Let  me  repeat, 
and  repeat,  and  repeat,  if  necessary,  that  you  can- 
not turn  the  planet,  the  natural  instrument  of 
production,  into  the  same  thing  as  capital,  the 
artificial  instrument,  by  capitalizing  the  two  to- 
gether. You  can  no  more  do  it  than  you  can 
change  horses  into  cows  by  capitalizing  live  stock. 
Though  they  become  interchangeable  in  trade, 
they  are  no  more  identical  in  fact  than  they  were 
before. 

But  it  is  this  undiscriminating  capitalization, 
as  I  think,  Doctor,  that  causes  our  socialistic 
friend  to  assure  us,  with  entire  good  faith  as  both 
of  us  know,  that  monopoly  of  land,  the  natural 
instrument  of  production,  has  come  to  be  of  sec- 
ondary economic  importance  to  monopoly  of  capi- 
tal, the  aggregate  of  existing  artificial  instru- 
ments. Even  if  he  had  said  that  their  economic 
importance  is  equal,  we  should  have  wondered. 
For  how  can  temporary  artificial  instruments  be 
of  equal  importance  to  the  perennial  natural  source 
of  all  artificial  products,  artificial  instruments  in- 
cluded ?  But  when  he  gives  primary  importance  to 
these  temporary  artificial  products,  and  only  see- 


MARX   AND    GEORGE.  297 

ondary  importance  to  their  perennial  natural 
source,  what  is  one  to  say  ? 

Wasn't  it  as  hard  for  you  as  for  me  to  under- 
stand what  he  meant  the  other  day  when  he  as- 
serted that  if  he  had  all  the  existing  capital,  and 
the  workers  had  all  the  land,  he  could  drive  the 
workers  off  the  face  of  the  earth  by  refusing  them 
the  use  of  his  capital?  It  truly  did  seem  absurd 
to  me,  and  I  mean  no  disrespect  whatever  to  him, 
for  you  know  I  hold  him  in  high  esteem, — but  it 
did  seem  absurd  that  a  monopolist  who  owned 
only  capital  could  drive  laborers  off  the  planet,  if 
the  laborers  owned  the  planet,  merely  by  refusing 
to  let  them  use  the  capital  which  they  as  a  class  had 
produced  and  as  a  class  could  easily  reproduce. 

But  you  see,  Doctor,  he  didn't  mean  the  planet 
when  he  talked  of  workers  owning  all  the  land. 
He  meant  only  the  parts  of  it  that  landlords  own 
as  landlords — as  a  distinct  personal  class.  Don't 
you  recall  his  figures  in  which  he  estimated  land 
monopoly  at  so  many  millions,  and  capital 
monopoly  at  many  millions  more?  Why,  he 
left  all  sorts  of  landed  property  outside  of  his 
millions'  worth  of  land,  and  included  all  sorts  of 
landed  property  in  his  millions'  worth  of  capital. 
He  seems  to  have  lost  sight  altogether  of  the  land 
that  capitalists  treat  as  part  of  their  capital;  the 
land,  for  instance,  that  is  represented  in  the  stocks 
of  land-owning  corporations — such  as  mining  and 
railway  companies.  It  is  no  longer  land  to  him, 
any  more  than  it  is  to  them.  In  our  friend's 
thought,  as  in  that  of  the  capitalist's,  all  this 
most  important  land,  this  vital  natural  instru- 
ment of  production — all  of  it  inventories  as  capi- 
tal. Though  a  natural  instrument  of  production, 
it  is  tumbled  indiscriminately  into  the  same  inven- 
tory with  his  artificial  instruments.  He  may  dis- 
tinguish when  you  come  down  to  definitions,  but 
haven't  you  noticed  how  he  drifts  away  when  the 


298  SOCIAL    SERVICE. 

argument  is  resumed?  It  is  the  confusion  which 
the  capitalistic  line  of  thought  promotes,  that 
gets  him  out  of  the  main  current  of  economic 
thought  and  into  the  eddies. 

It  would  not  be  fair  to  our  friend,  however,  to 
attribute  his  misapprehension  altogether  to  his 
own  heedlessness.  Karl  Marx  as  well  as  our 
friend  sometimes  seemed  to  lose  his  way  in  this 
wilderness  of  capitalistic  thought,  although  I 
think  that  he  really  recognized  as  vital  the  dis- 
tinction I  have  made.  Let  me  read  you  from 
Marx's  "Capital."  My  copy  is  the  first  English 
edition,  published  in  1889,  a  translation  by  Moore 
and  Aveling  from  the  third  German  edition,  and 
edited  by  Frederick  Engels.  At  the  beginning  of 
the  first  chapter,  Marx  writes : 

The  wealth  of  those  societies  in  which  the  capi- 
talist mode  of  production  prevails,  presents  itself  as 
an  immense  accumulation  of  commodities,  its  unit 
being  a  single  commodity.  Our  investigation  must 
therefore  begin  with  the  analysis  of  a  commodity. 

Now  observe,  Doctor,  the  subject  of  consider- 
ation here  is  wealth  as  found  in  capitalistic  so- 
ciety. We  are  told  that  it  consists  of  "commod- 
ities." So  far,  then,  I  find  myself,  as  I  have 
already  explained  to'  you,  in  substantial  agreement 
with  the  great  expositor  of  socialism.  Capitaliza- 
tion makes  a  commodity  of  everything  it  touches. 
And  now  comes  the  Marxian  analysis  of  a  com- 
modity. Listen : 

A  commodity  is,  in  the  first  place,  an  object  out- 
side us. 

Very  good,  provided  "us"  be  understood  as  in- 
cluding only  the  acknowledged  members  of  cap- 
italistic society.  For  capitalistic  industry  might 
comprise  chattel  slavery,  and  then  the  slaves  would 
be  commodities,  capitalistic  wealth.  A  commodity 
would  still  be  outside  the  members  of  the  society, 
for  slaves  would  not  be  accounted  members;  but 


MARX   AND   GEORGE.  299 

some  commodities  would  not  be  outside  of  some 
persons,  since  every  slave  would  be  a  person  and 
yet  a  commodity.  But  of  course  Marx  contem- 
plated in  his  definition  of  a  capitalistic  commodity 
only  such  objects  as  are  outside  the  acknowledged 
membership  of  capitalistic  society ;  so  this  part  of 
his  analysis  may  go  without  criticism.  A  commod- 
ity, then,  is  an  object  outside  of  us.  It  is  also, 
he  continues — 

a  thing  that  by  its  properties  satisfies  human  wants 
of  some  sort  or  another.  The  nature  of  such  wants, 
whether,  for  instance,  they  spring  from  the  stom- 
ach, or  from  fancy,  makes  no  difference.  Neither 
are  we  here  concerned  to  know  how  the  object  sat- 
isfies these  wants,  whether  directly  as  means  of  sub- 
sistence, or  indirectly  as  means  of  production. 

Well,  Doctor,  in  view  of  our  talks  I  reckon 
we'll  both  agree  to  that,  won't  we? 

At  this  point  Marx  states  his  definition  of  use- 
values.  We  have  had  the  same  idea  in  consider- 
ing the  subject  of  desirability.  He  adds  with 
reference  to  use  values  that  they  "constitute  the 
substance  or  body  or  quality  of  all  wealth,  as  dis- 
tinguished from  its  quantity  in  terms  of  'exchange 
value';"  and  then  he  proceeds  to  say  that  in  the 
capitalistic  form  of  society  "use  values" — 
are,  in  addition,  the  material  depositories  of  ex- 
change value.  Exchange  value,  at  first  sight,  pre- 
sents itself  as  a  quantitative  relation,  as  the  pro- 
portion in  which  values  in  use  of  one  sort  are  ex- 
changed for  those  of  another  sort,  a  relation  con- 
stantly changing  with  time  and  place. 

After  elaborating  this  capitalistic  idea  with 
some  necessary  detail,  he  concludes  that — 
the  exchange  values  of  commodities  must  be  capa- 
ble of  being  expressed  in  terms  of  something  com- 
mon to  them  all,  of  which  thing  they  represent  a 
greater  or  less  quantity. 

This  common  "something"  he  then  ascertains 
by  considering  that — 
as  use-values  commodities  are,  above  all,  of  differ- 


300  SOCIAL    SERVICE. 

ent  qualities;  but  as  exchange  values  they  are  mere- 
ly different  quantities,  and  consequently  do  not  con- 
tain an  atom  of  use-value.  If,  then,  we  leave  out 
of  consideration  the  use-value  of  commodities,  they 
have  only  one  common  property  left,  that  of  being 
products  of  labor. 

Now,  Doctor,  if  we  stopped  there  Marx  might 
appear  to  a  careless  reader  as  having  made  a  false 
analysis.  For  he  begins  by  defining  commodities 
so  as  to  include  land — "an  object  outside  us," 
don't  you  recall  ?  which  "by  its  properties  satisfies 
human  wants/'  whether  "directly,  as  means  of 
subsistence,  or  indirectly,  as  means  of  production," 
— and  he  ends  by  distinguishing  commodities  as 
products  of  labor.  But  land  is  not  a  product 
of  labor.  If,  however,  you  read  the  quotation  a 
second  time  you  will  find  that  his  intention  is  to 
show  that  it  is  value — not  "use-value"  but  "ex- 
change value" — which  is  the  labor  product.  This 
interpretation  is  confirmed  by  his  metaphysical 
reasoning  that  follows,  It  is,  I  should  say,  as  if 
he  had  made  his  statement  like  this :  "Considered 
as  material  substantial  objects,  commodities  are, 
above  all,  of  different  qualities;  but  considered  as 
values  in  exchange  they  are  merely  different 
quantities,  and  consequently  do  not  contain  an 
atom  of  material  substance.  If,  then,  we  leave 
out  of  consideration  the  material  substance  of 
commodities,  they  have  only  one  common  property 
left,  that  of  being  products  of  labor." 

To  this  idea  we  have  already  agreed  in  a  way; 
and  though  only  in  a  way,  yet  probably  in  the 
way  that  Marx  meant.  Since  we  accept  the 
values  of  commodities  as  expressive  of  the  irksome- 
ness  of  labor  which  their  possession  will  save,  we 
may  agree  that  in  a  metaphysical  sense  labor  pro- 
duces all  value.  There  could  be  no  value  without 
commodities,  and  labor  does  produce  all  com- 
modities except  land.  And  while  labor  does  not 
produce  land,  there  is  a  sense  in  which  it  may  be 


MARX    AND    GEORGE.  301 

loosely  said  to  produce  land  values.  For  it  is  by 
the  extension  of  labor  forces  to  the  use  of  in- 
ferior lands  that  superior  lands  become  valuable. 

That  labor  does  not  produce  natural  commodi- 
ties, but  that  these  are  the  source  of  production 
and  not  its  results,  Marx  recognizes  so  clearly  in 
his  next  chapter  as  to  leave  no  room  for  cavil.  I 
refer  to  what  he  says  specifically  of  "use-values." 
By  "use-values"  he  evidently  means  what  I  mean 
by  artificial  things,  or  "wealth" — the  products  of 
labor  from  land.  Listen  again : 

The  use-values,  coat,  linen,  etc.,  i.  e.,  the  bodies 
of  commodities,  are  combinations  of  two  elements — 
matter  and  labor.  If  we  take  away  the  useful  labor 
expended  upon  them,  a  material  substratum  is  al- 
ways left,  which  is  furnished  by  nature  without  the 
help  of  man.  The  latter  can  work  only  as  Nature 
dees,  that  is  by  changing  the  form  of  matter.  Nay, 
more,  in  this  work  of  changing  the  form  he  Is  con- 
stantly helped  by  natural  forces.  We  see,  then, 
that  labor  is  not  the  only  source  of  material  wealth, 
of  use-value  produced  by  labor.  As  William  Petty 
puts  it,  labor  is  its  father  and  the  earth  its  mother. 

If  Marx  had  held  tight  to  that  understanding 
— something  which  he  realized  as  true  of  all  modes 
of  production,  whether  capitalistic  or  not, — he 
would  not  have  made  so  inadequate  a  use  as  he  did 
of  a  certain  significant  Australian  incident  of 
which  I  shall  read  you  in  a  moment. 

But  after  this  brief  reference  to  "the  bodies  of 
commodities,"  which  he  describes  as  "combina- 
tions of  two  elements,  matter  and  labor," — accur- 
ately, if  he  means  artificial  commodities  only,  but 
quite  inaccurately  if  he  intends,  as  I  am  sure  he 
does  not,  to  include  all  objects  outside  us  which 
directly  or  indirectly  satisfy  human  wants, — he 
turns  the  whole  force  of  his  great  intellect  upon 
the  ghost  of  commodities,  upon  the  immaterial, 
unsubstantial,  metaphysical,  capitalistic  concept 
of  value  as  an  abstraction  from  the  objects  valued. 

And  now,  Doctor,  let  me  read  you  the  Austral- 


302  SOCIAL    SERVICE. 

ian  incident' to  illustrate  one  of  the  effects  of  his 
having  thus  slipped  his  anchorage  and  gone  sail- 
ing off  into  the  cloudland  of  capitalistic  meta- 
physics. In  his  thirty-third  chapter,  in  the 
course  of  a  discussion  of  modern  colonization, 
Marx  tells — here  it  is,  on  page  791, — of  a  Mr. 
Peel,  who — 

took  with  him  from  England  to  Swan  River,  West 
Australia,  means  of  subsistence  and  of  production  to 
the  amount  of  £50,000.  Mr.  Peel  had  the  foresight 
to  bring  with  him,  besides,  3,000  persons  of  the  work- 
ing class,  men,  women  and  children.  Once  arrived 
at  his  destination,  "Mr.  Peel  was  left  without  a 
servant  to  make  his  bed  or  fetch  him  water  from 
a  river." 

Now,  what  would  you  suppose  that  situation  to 
imply,  Doctor?  Certainly;  so  should  I.  With 
plenty  of  good  land  all  around,  available  for  the 
taking,  those  "3,000  persons  of  the  working  class" 
could  not  be  coerced  by  Mr.  Peel,  although  he  had 
£50,000  of  capital  and  they  had  none.  But 
what  do  you  suppose  is  Marx's  comment?  Here 
it  is: 

Unhappy  Mr.  Peel,  who  provided  for  everything 
except  the  export  of  English  modes  of  production  to 
Swan  River. 

Now,  Doctor,  I  don't  intend  to  try  Man's 
philosophy  by  the  test  of  one  of  his  brief  illustra- 
tive allusions.  But  doesn't  it  look  as  if  he  had 
got  so  far  away  from  what  he  calls  the  "bodies 
of  commodities"  as  to  lose  sight  of  the  plain  com- 
mon sense  fact  that  whether  on  Swan  Elver  or  on 
the  Thames,  coercive  power  over  labor  really  de- 
pends upon  monopoly,  not  of  the  artificial,  but  of 
the  natural  instruments  of  production — of  the  nat- 
ural ones  ? 

Indeed,  we  might  not  unfairly  assume  that 
Marx  himself  so  believed.  When  he  writes  of  the 
unhappy  Mr.  Peel  who  provided  for  everything 
except  the  export  of  English  modes  of  production 


MARX   AND    GEORGE.  303 

to  Swan  River,  Marx  may  very  well  be  interpreted, 
without  doing  any  violence  to  his  general  exposi- 
tion, as  having  meant  that  Mr.  Peel  had  neglected 
to  export  land  capitalism  from  England.  Land 
capitalism  is  the  capitalistic  method  of  cutting  off 
producers  from  access  to  the  natural  instruments 
of  production — the  natural  instruments,  mind 
you;  and  as  land  capitalism  did  not  prevail  on 
Swan  River  those  servants  of  the  Peel  expedition 
were  free.  Mr.  Peel  could  not  coerce  them  with 
his  £50,000  of  capital.  With  all  that  land  avail- 
able to  them,  what  cared  they  for  the  accumulated 
artificial  instruments  which  Peel's  money  repre- 
sented to  the  amount  of  a  quarter  of  a  million  dol- 
lars ?  While  that  supply  of  artificial  instruments 
would  have  been  a  convenience,  it  was  not  a  neces- 
sity. 

That  Karl  Marx  did  believe  that  coercive  power 
over  labor  depends  upon  monopoly  of  land,  not 
only  under  feudalism  but  also  under  capitalism, 
appears  from  a  specific  statement  of  his  made  as 
late  as  1875,  and  published  by  his  friend  Engels 
in  1891.  I  find  it  in  the  International  Socialist 
Review  for  May,  1908.  It  appears  as  part  of 
a  criticism  of  a  socialist  program  made  under  the 
influence  of  followers  of  Lassalle.  One  sentence 
of  that  program  had  described  labor  as  "the 
source  of  all  wealth,"  and  with  reference  to  this 
declaration  Marx  wrote,  as  I  find  it  quoted  here 
at  page  643  of  the  Review : 

Labor  is  not  the  source  of  all  wealth.  Nature  is 
Just  as  much  the  source  of  use  values  (and  of  such, 
to  be  sure,  is  material  wealth  composed)  as  is  la- 
bor, which  itself  is  but  the  expression  of  a  natural 
force,  of  human  labor  power. 

Turn  now  to  page  645  of  the  Review  and  you 
will  find  that  Marx  speaks  in  that  way,  not  only 
of  a  period  when  feudalistic  customs  prevailed, 
but  of  the  present  age  of  production  on  a  largy 


304  SOCIAL    SERVICE. 

scale  and  with  enormous  artificial  tools — of  this 
very  age  of  capitalism.  For  there  he  says,  writ- 
ing as  late  as  1875,  remember — 

In  the  society  of  today,  the  means  of  labor  arc 
monopolized  by  the  landed  proprietors.  Monopoly 
of  landed  property  is  even  the  basis  of  monopoly  ot 
capital  and  by  the  capitalists. 

Keturning  now  to  his  book,  "Capital,"  I  find 
that  the  language  of  Marx  last  quoted  merely  con- 
firms his  earlier  conclusion  concerning  the  power 
of  land  monopoly  to  coerce  labor  under  the  pres- 
ent capitalistic  system.  In  the  last  chapter  of 
"Capital,"  on  page  793  of  my  edition,  Marx  ex- 
plicitly says: 

We  have  seen  that  the  expropriation  of  the  mass 
of  the  people  from  the  soil  forms  the  basis  of  the 
capitalist  mode  of  production. 

However  far  apart  Karl  Marx  and  Henry 
George  may  be  at  other  points,  Doctor,  they  are 
close  together  at  this  vital  point.  Making  al- 
lowance for  their  differing  habits  of  thought  and 
forms  of  expression,  and  getting  down  to  their  es- 
sential meanings,  I  should  say  that  upon  this  point 
— the  most  vital  one,  it  seems  to  me,  in  the  whole 
industrial  problem — they  are  absolutely  at  one. 
Take  up  that  first  volume  of  "Progress  and  Pov- 
erty," over  there,  and  read  George's  remarks  upon 
the  confusion  under  capitalism  of  natural  with  ar- 
tificial instruments,  of  planet  values  with  product- 
values,  of  land  with  capital.  You  will  find  it  in 
the  chapter  on  spurious  capital  at  page  189: 

In  the  speech  and  literature  of  the  day  everyone 
is  styled  a  capitalist  who  possesses  what,  independ- 
ent of  his  labor,  will  yield  him  a  return,  while  what- 
ever is  thus  received  is  spoken  of  as  the  earnings  or 
takings  of  capital,  and  we  everywhere  hear  of  the 
conflict  of  labor  and  capital.  Whether  there 
Is  in  reality  any  conflict  between  labor  and  capital, 
I  do  not  yet  ask  the  reader  to  make  up  his  mind; 
but  it  will  be  well  here  to  clear  away  some  misap- 
prehensions which  confuse  the  judgment.  Atten- 


MARX  AND  GEORGE.  305 

tion  has  already  been  called  to  the  fact  that  land 
values,  which  constitute  such  an  enormous  part  of 
what  is  commonly  called  capital,  are  not  capital  at 
all. 

I  could  give  you  numerous  other  quotations, 
showing  that  George  insisted  upon  distinguishing 
the  natural  instruments  of  social  service  from  the 
artificial  ones  under  all  circumstances,  and  that 
he  recognized  the  evil  powers  of  capitalism  as 
springing  fundamentally  from  land  monopoly  dis- 
guised as  capital.  But  it  is  unnecessary,  for  that 
was  the  key  to  his  solution  of  the  social  service 
problem,  and  you  may  read  it  at  leisure  in  his 
books. 


CHAPTER  XVHI. 
From  Primitive  to  Capitalistic  Production. 

Recalling  our  conversations  about  the  funda- 
mental confusion  of  capitalistic  thought,  Doc- 
tor, doesn't  it  seem  to  you  by  this  time  that  we 
ought  to  emphasize  the  manifest  distinction  which 
capitalists  and  socialists  alike  are  so  prone  to  ig- 
nore? Don't  you  agree  that  if  we  wish  to  think 
clearly  upon  the  subject  of  social  service,  we  must 
distinguish  the  two  sources  of  capitalistic  power? 
Isn't  it  absolutely  necessary  to  clarity  of  thought, 
that  the  power  which  springs  out  of  capitalization 
of  the  artificial  instruments  of  production  pro- 
duced by  labor  from  and  on  the  planet,  be  dis- 
tinguished from  the  power  which  springs  out  of 
capitalization  of  the  planet  itself  ?  Isn't  it  simple 
horse  sense  to  distinguish  the  secondary  from  the 
primary  class  of  productive  instruments,  the  arti- 
ficial from  the  natural,  machinery  from  the  land 
out  of  which  machinery  is  continually  produced 
and  upon  which  it  must  be  used  if  used  at  all? 
And  is  it  any  less  important  to  make  this  distinc- 
tion when  these  two  different  kinds  of  things  are 
capitalized  and  interchangeable,  than  when  they 
are  not  ?  Aye,  aye !  I  thought  you  would  say  so. 
It  is  always  important  to  make  the  distinction. 

Well,  we  have  already  considered  the  matter 
of  these  two  sources  of  capitalistic  power,  and 
have  concluded  that  labor  activities  cannot  be 
cut  off  from  industrial  access  to  artificial  instru- 
ments directly,  without  express  laws  of  exclusion. 
Put  if  you  have  reflected  on  our  last  talk  I  think 


PRODUCTION.  307 

you  will  also  agree  that  labor  interests  can  be  cut 
off  from  them  indirectly  by  being  cut  off  from  the 
great  natural  instrument.  In  other  words,  I  think 
you  will  realize  that  machinery,  no  matter  how 
gigantic,  cannot  be  withheld  from  use  by  labor 
interests  without  direct  and  arbitrary  prohibition, 
unless  obstacles  are  placed  in  the  way  of  the  ac- 
cess of  labor  to  land ;  but  that  monopoly  of  land 
will  produce  monopoly  of  machinery.  Let  us  see 
if  I  cannot  make  this  quite  clear. 

Before  going  any  further,  however,  I  must  re- 
mind you  that  it  really  makes  no  essential  differ- 
ence to  labor  interests  whether  the  natural  instru- 
ments of  production  are  monopolized  by  a  per- 
sonal class,  such  as  landlords  were  under  the  sys- 
tem of  feudal  tenures  of  land,  or  by  means  of 
impersonal  commercial  interests,  such  as  those  of 
our  present  capitalistic  system  under  which  the 
natural  and  the  artificial  instruments  of  produc- 
tion are  indiscriminately  capitalized.  In  either 
case  labor  is  exploited  and  plundered.  Accidental 
or  arbitrary  differences  there  may  be;  but  on  the 
whole  the  commands  of  the  landlord  under  feudal- 
ism were  essentially  the  same  as  are  the  demands 
of  the  investor  under  capitalism. 

Bear  that  in  mind,  Doctor,  and  then  think  for 
a  moment  of  production  in  its  most  primitive 
forms.  Don't  be  confused  by  the  fact  that  the 
simple  primitive  forms  have  given  way  to  complex 
capitalistic  forms;  but  think  upon  them  as  a  pre- 
lude to  considering  the  capitalistic  forms.  Now, 
what  are  the  most  primitive  forms  of  produc- 
tion? 

A  common  example  is  a  naked  savage  at  th« 
shore  of  the  sea,  digging  clams  with  his  fingers. 

Analyze  that  example,  and  what  do  you  find? 
I  should  say  four  things,  wouldn't  you?  First, 
the  naked  savage  digging  clams:  a  man  working 
for  his  living.  Second,  the  seashore,  in  the  sands 


308  SOCIAL    SERVICE. 

of  which  the  clams  are  naturally  deposited:  a 
part  of  the  planet.  Third,  the  clams  in  their  nat- 
ural state  in  the  sand:  also  part  of  the  planet. 
Fourth,  the  clams  picked  out  of  the  sand  and 
pulled  from  their  shells  by  the  crude  art  of  the 
savage:  artificial  products  of  that  man's  work 
from  that  natural  storehouse  of  the  planet. 

Those  four  things  really  resolve  themselves  into 
three,  for  the  clams  lying  naturally  in  the  sand  of 
the  shore,  and  the  shore  itself,  are  identical  in 
economic  character.  They  are  natural  instru- 
ments or  sources  of  satisfying  human  wants — in 
this  case,  of  satisfying  hunger. 

So  we  have  in  that  example  one  of  the  most 
primitive  examples  of  production ;  a  man  applying 
his  work  to  the  planet  to  procure  food.  Using 
Karl  Marx's  terms,  we  could  translate  that  analy- 
sis into  something  like  this :  "Labor"  applied  to 
"matter"  to  produce  "use-values."  But  as  I  pre- 
fer the  terms  of  the  classical  political  economy, 
I  should  express  the  same  idea  by  interpreting 
that  example  of  primitive  production  as  an  in- 
stance in  simplest  form  of  the  application  of 
"labor"  to  "land"  to  produce  "wealth."  With 
either  set  of  terms,  the  meaning  is  the  same. 

Pausing  here  for  a  moment,  let  us  try  to  see 
how  that  process  could  be  obstructed. 

Given  the  hungry  man  and  the  natural  clam 
deposit,  would  obstruction  be  possible  except  in  one 
of  two  ways  ?  Could  anything  obstruct  that  process 
except  coercion  of  the  man  by  direct  application 
of  force  to  his  person,  or  through  his  acknowledg- 
ment of  another's  dominion  over  the  clam  bed? 
I  think  not.  You  could  apply  force  directly  to  his 
person  by  enslaving  the  man's  body,  compelling 
him  to  dig  clams  for  you,  supporting  him 
out  of  his  own  product,  and  then  living 
yourself  upon  its  surplus;  or,  recognizing  hig 
personal  freedom,  you  could  assume  governmental 


PRODUCTION.  309 

sovereignty  over  him  as  citizen  or  subject,  and 
take  a  portion  of  his  clams  as  a  tax  without  his 
consent.  Either  way  would  be  a  direct  application 
of  force.  But  if  you  would  avoid  the  use  of  force, 
you  might  in  some  way  induce  him  to  acknowl- 
edge your  ownership  of  the  sea  shore  where  the 
clams  were  in  their  natural  state,  and  then  forbid 
his  digging  clams  there  except  upon  such  terms 
of  rent  or  purchase  as  would  give  you  a  share  in 
the  clams  he  dug.  No  matter  which  method  you 
adopted,  however,  you  would  be  getting  service 
from  him  without  giving  service  to  him. 

Now,  what  I  want  you  to  observe,  Doctor,  is 
that  those  obvious  principles  are  not  confined  to 
primitive  forms  of  production.  They  extend  all 
the  way  up  from  the  simplicity  of  that  sea-shore 
example,  through  the  epochs  of  paternal  slavery, 
serfdom,  and  feudalism,  into  the  complexities  of 
the  present  era  of  capitalism. 

In  all  production,  no  matter  what  the  form, 
there  are  those  three  things,  and  only  those  three 
— the  human  worker,  the  natural  instruments  or 
sources,  and  the  artificial  products.  And  in  all 
distribution  or  division  there  are  but  two  ways  of 
diverting  any  share  of  those  products  from  the 
workers  who  produce  them — by  direct  action  upon 
the  person  of  the  worker,  or  by  indirect  action 
through  monopoly  of  his  natural  instruments  or 
sources. 

Throughout  production  and  distribution,  then, 
those  three  elements — the  human  worker,  the  nat- 
ural instruments  or  sources,  and  the  product- 
must  be  separately  recognized.  Essentially  dif- 
ferent, they  must  be  constantly  distinguished.  In 
other  words,  "labor,"  "land,"  and  "wealth"  differ 
in  kind  and  must  be  scrupulously  distinguished 
in  reasoning  about  them.  Yes;  we  might  trans- 
late these  terms  into  Marx's,  and  say,  meaning 
the  same  thing,  that  "labor,"  "matter,"  and  "use- 


310  SOCIAL    SERVICE. 

values"  differ  in  kind  and  must  be  scrupulously 
distinguished. 

Let  us  now  advance  a  stage  from  that  primi- 
tive clam  digging,  holding  however  to  familiar 
illustrations.  Borrowing  one  of  these,  let's  sup- 
pose that  the  naked  clam  digger  finds  he  can  save 
his  fingers  and  yet  dig  clams  faster  and  eat  them 
more  comfortably  if  he  digs  them  with  a  stick 
and  breaks  them  open  with  stones. 

Then  he  must  get  a  suitable  stick.  And  what 
does  this  mean?  Does  it  mean  that  he  must  de- 
pend upon  some  stick-owner  for  permission  to  dig 
clams  with  a  stick  instead  of  digging  them  with 
his  fingers?  Not  at  all.  He  goes  to  another  part 
of  his  natural  instrument  or  source  of  production 
— goes  back,  that  is,  a  little  way  from  the  shore, — 
and  applies  his  work  to  that  part  of  the  planet  to 
get  himself  a  stick.  When  he  gets  it,  it  is  an  arti- 
ficial instrument  for  clam  production,  isn't  it? 
And  in  getting  it  hasn't  he  applied  his  "labor"  to 
'land"  to  produce  "capital"  with  which  to  get 
food?  And  hasn't  he  done  the  same  to  get  the 
stones  ?  And  isn't  he  then  a  capitalist  in  the  sense 
of  being  an  owner  of  capital  ?  And  thereafter,  in 
digging  and  opening  clams,  doesn't  he  use  arti- 
ficial instruments  as  well  as  natural  instruments 
in  securing  artificial  products — "capital"  as  well 
as  "land"  in  securing  "wealth"?  And  wouldn't 
it  be  the  same  in  principle  if  one  or  two  of  the 
tribe  gathered  the  sticks  and  stones  and  swapped 
this  capital  with  the  rest  of  the  tribe  for  some  ot 
the  clams  they  dig? 

And  what  is  the  essential  nature  of  that  capital  ? 
Isn't  it  unfinished  wealth  ?  Aren't  those  sticks  and 
those  stones  unfinished  sea  food,  since  they  are 
procured  as  part  of  the  process  of  making  sea  food 
— as  part  of  the  process  of  getting  and  making 
edible  the  clams  found  at  the  shore  ? 

Can  you  possibly  think,  then,  that    anybody 


PRODUCTION.  311 

could  coerce  that  savage  by  merely  taking  away 
from  him  that  stick  and  those  stones  ?  Not  in  a  mil- 
lion years,  provided  he  retained  access  to  the  nat- 
ural sources  of  such  sticks  and  such  stones.  So  long 
as  he  and  his  fellow  workers — the  stick  and  stone 
gatherers,  the  "capitaP'-makers — so  long  as 
they  had  access  to  the  natural  instruments  of 
his  clam  production  (the  sea  shore  with  its  nat- 
ural clam  deposits,  and  the  upland  with  its  natural 
deposits  of  stones  and  its  natural  growth  of  sticks), 
so  long  as  he  was  free  in  that  respect,  the  loss 
of  those  tools  of  his  would  not  conquer  him.  It 
might  put  him  to  temporary  inconvenience,  of 
course;  but  it  couldn't  make  him  economically  de- 
fenseless. 

Yes,  I  rather  think  you  are  right  about  that 
famous  water  tank  parable  of  Bellamy's,  which 
our  socialist  friend  is  fond  of  quoting.  I  reckon 
it  does  fit  in  here.  Let  me  see  if  I  have  Bellamy's 
book  handy.  Ah,  here  it  is — "Equality." 

The  parable  occurs  in  chapter  twenty-three. 
But  it  takes  up  the  whole  chapter  and  we  won't 
stop  to  read  it.  You  remember  the  point  about  it. 
According  to  the  parable,  there  was  an  arid  coun- 
try in  which  men  worked  at  nothing  but  getting 
water.  Some  of  the  crafty  ones,  capitalists,  had 
gathered  stores  af  water,  from  which  they  gave 
drink  to  the  thirsty  on  condition  that  these  be- 
come their  servants,  they  and  their  children.  So 
the  capitalists  organized  the  servants  into  work- 
ing bands.  Some  dipped  at  the  springs;  others 
carried  to  the  tank,  where  all  the  people  came  to 
drink;  others  sought  out  new  springs.  And  the 
capitalists  gave  a  penny  for  each  bucket  of  water 
poured  into  the  tank,  and  charged  two  for  every 
bucket  taken  out.  In  time,  however,  so 
fruitful  was  the  work  of  the  servants,  the  tank 
overflowed;  and  then  the  capitalists  said  to 
the  people,  "Sit  ye  down  and  be  patient,  for  ye 


312  SOCIAL    SERVICE. 

shall  bring  us  no  more  water  till  the  tank  be 
empty."  This  made  hard  times,  business  depres- 
sion, for  when  the  servants  got  no  more  pennies 
they  could  buy  no  more  water.  And  the  people 
suffered  and  murmured,  and  the  capitalists  lost 
money  and  swore — or  words  to  that  effect.  After 
a  while  the  suffering  of  the  people  was  such  that 
they  threatened  to  take  the  tank  by  force.  But 
after  another  while  the  water  in  the  tank  had  fall- 
en low,  and  then  the  people  were  employed  to 
fill  it  again.  When  these  experiences  had  been 
many  times  repeated,  and  there  had  been  much 
bad  language  and  some  incidental  mob  violence, 
the  whole  trouble  was  settled  by  dismissing  the 
capitalists  as  bosses  of  the  water-workers  and  mak- 
ing a  collective  organization  in  which  the  workers 
governed  themselves  and  each  took  pay  according 
to  his  work,  with  no  rake-off  "profit"  for  anybody. 

Now,  Doctor,  I  regard  that  as  really  a  splendid 
social  parable,  all  the  way  through — except  as  to 
its  method  of  reform. 

Eight  there  Bellamy  "falls  down."  No,  it  is  not 
to  the  self-organization,  and  the  dismissal  of  the 
capitalists,  and  the  abolition  of  rake-off  "profit" 
that  I  object.  I  put  all  those  things  in  the  meri- 
torious part  of  the  parable.  What  I  regard  as  its 
weakness  is  the  impotency  of  the  method  proposed 
for  accomplishing  those  results.  That  is  a  weak- 
ness which  is  due  to  Bellamy's  failure  to  appre- 
ciate the  essential  difference  between  natural 
springs  and  artificial  tanks. 

I  realize,  of  course,  that  Bellamy  used  the  tank 
as  a  simile  for  the  market,  as  a  symbol  for  Marx's 
idea  of  commodities  as  "exchange  values,"  as  a 
form  of  industrial  organization,  and  not  as  a  ma- 
chine made  of  wood.  What  he  evidently  intended 
to  point  at  as  the  power  that  dominates  labor,  was 
not  capital  in  the  sense  of  an  artificial  machine. 
His  allusion  was  to  business  organization. 


PRODUCTION.  313 

But  for  this  purpose  the  tank  as  a  symbol  was 
unfortunate.  To  our  friend  down  the  street,  you 
know,  it  really  does  stand  for  artificial  instru- 
ments of  production,  for  machinery.  So  consid- 
ered, the  parable  is  valueless,  of  course,  in  its  con- 
structive features.  The  question  that  at  once  arises 
is  this:  No  matter  if  the  tank  owners  did  stop 
the  use  of  the  artificial  tank,  why  did  the  workers 
suffer  for  want  of  water  if  the  natural  springs 
were  still  free  to  them?  They  knew  how  to  dip, 
and  they  knew  how  to  carry.  Did  the  capitalists 
own  the  pails  and  the  tank  ?  Even  so,  there  must 
still  have  been  natural  wood  in  that  country ;  why 
didn't  some  of  the  workers  make  pails  and  a  tank 
for  the  rest? 

To  be  sure,  the  parable  assumes  a  country  in 
which  all  artificial  products  consist  of  water  car- 
ried to  a  tank.  But  if  you  lay  your  emphasis  there, 
then  the  pails  and  the  tank  must  have  symbolized 
some  kind  of  natural  instruments  of  production, 
like  the  springs;  and  in  that  case  the  power  of 
the  capitalists  resided  in  a  monopoly  of  natural 
instruments,  and  not  in  a  monopoly  of  artificial 
instruments  or  capital — in  a  monopoly  of  land 
and  not  in  a  monopoly  of  machinery. 

As  an  illustration  of  the  economic  power  of 
the  monopoly  of  artificial  instruments  of  produc- 
tion, Bellamy's  parable  is  without  value.  As  an 
illustration  of  the  power  of  the  economic  monopoly 
of  natural  instruments,  it  would  be  excellent  but 
for  the  defective  symbolism  which  makes  it  appear 
to  be  an  illustration  of  the  power  of  monopoly  of 
artificial  instruments.  While  land-capitalism  is 
deadly  to  labor  interests,  whether  alone  or  as  an 
element  in  capital-capitalism,  the  latter  is  quite 
innocuous  without  the  former.  All  the  evil  of  cap- 
italism is  traceable  to  land  capitalism. 

Eeturning  for  further  simple  exemplification  of 
this  to  our  clam  digger,  with  sticks  and  stones  for 


314  SOCIAL    SERVICE. 

his  capital,  we  can  see  that  he  is  independent  as 
long  as  he  has  access  to  the  natural  sources  of 
supply  of  sticks  and  stones  and  clams.  But  what 
is  true  of  the  clam  digger  in  those  primitive  cir- 
cumstances, Doctor,  is  true  of  industry  as  a  whole 
in  the  most  advanced  stages  of  the  industrial  arts 
and  the  most  complex  conditions  of  commer- 
cialism. 

If  all  workers,  with  their  vast  diversity  of 
knowledge  and  skill,  are  unobstructed,  as  workers, 
in  access  to  all  the  appropriate  natural  instru- 
ments of  production,  they  can  laugh  at  the  capital- 
ists who  threaten  to  coerce  them  by  monopolizing 
the  existing  artificial  instruments.  But  if  diversi- 
fied labor  be  obstructed  in  its  access  to  the  natural 
instruments  of  production,  then  mere  laborers  are 
indeed  helpless  and  capitalists  all  powerful. 

The  coercion  of  labor  has  always  been  ac- 
complished in  that  way.  Except  as  bodily  slavery 
in  some  form,  or  some  of  its  equivalents,  such  as 
taxation  of  industry — except  as  something  of  this 
kind  has  played  a  part,  the  labor  of  the  world 
has  been  coerced  only  by  monopolization  of  the 
planet,  which  constitutes  the  one  all-comprehen- 
sive natural  instrument  of  production. 

In  the  feudal  regime,  and  in  regimes  of  kindred 
character — that  is  to  say,  in  eras  in  which  land- 
lordism was  a  distinct  and  visible  institution, — 
the  coercion  of  labor  by  obstructing  its  use  of  the 
planet  was  what  the  street  boy  would  call  "raw." 
Landlords,  claiming  divine  right  of  ownership  of 
the  planet,  "made  no  bones"  about  plundering 
workers.  Owning  the  earth,  they  owned  the  land- 
less who  lived  and  worked  upon  it,  and  they  didn't 
hesitate  to  say  so.  The  condition  was  really  one 
of  human  slavery.  The  master  had  become  a 
landlord,  the  slave  a  tenant  or  serf. 

But  with  the  development  of  capitalism  to  the 
point  of  sweeping  the  planet  itself  into  the  cate- 


PRODUCTION.  315 

gory  of  market  commodities,  landi-capitalism  took 
the  place  of  landlordism.  Consequently,  a  sort  of 
rude,  unbalanced,  unfair  personal  reciprocity  gave 
way  to  the  impersonal  wage-slave  condition  we 
now  see.  The  social  service  market,  through  its 
phenomena  of  value  measurements,  has  developed 
two  great — interests,  I  was  about  to  say,  Doctor, 
as  I  have  said  heretofore,  but  "interests"  has  so 
many  connotations  that  it  may  confuse  my  mean- 
ing; so  I  will  fall  back  on  a  good  old  word,  and 
say  "weal."  Two  great  weals,  then,  have  been 
developed  in  the  social  service  market  by  capital- 
ism, in  place  of  the  two  great  personal  classes  of 
feudalism — weal  in  production,  and  weal  in  the 
natural  instruments  of  production. 

Weal  in  production  includes  all  the  diversified 
interests  in  labor  and  its  fruits,  whether  these 
fruits,  as  some  modern  economists  would  call 
them,  be  "consumption  goods"  or  "production 
goods" ;  or,  as  the  old  economists  would  have  said, 
whether  they  be  "capital"  or  "wealth";  or,  as  I 
should  say,  whether  they  be  "artificial  instruments 
of  production"  or  "final  products." 

On  the  other  hand,  weal  in  the  natural  instru- 
ments of  production  includes  all  the  diversified 
proprietary  titles  to  the  planet. 

And  just  as  the  weal  of  landlord  class  and 
the  weal  of  vassal  class  under  feudalism  were  es- 
sentially hostile,  no  matter  how  tender  the  per- 
sonal relationships,  so  the  weal  in  production  and 
the  weal  in  natural  instruments  of  production 
under  capitalism  are  essentially  hostile,  no  matter 
how  cordial  the  personal  relationships,  or  even  how 
completely  these  hostile  weals  may  be  merged  in 
the  same  proprietary  titles  or  in  the  same  indi- 
vidual owners.  What  either  weal  gains,  the  other 
must  lose,  regardless  of  its  personal  distribution. 

Farmer  Doe,  for  example,  has  a  weal  in  the 
capitalization  of  his  farm  site,  another  in  the  cap- 


316  SOCIAL    SERVICE. 

italization  of  his  farm  improvements  and  machin- 
ery and  stock,  and  a  third  in  the  condition  of  him- 
self as  a  laborer.  Doe's  weal  as  a  laborer  is  pre- 
cisely that  of  old  Joshua,  his  hired  man,  who  hasn't 
a  dollar  in  the  world  except  his  monthly  wages. 
Doe's  weal  in  his  machinery  and  stock  is  of  the 
same  kind,  for  he  has  either  made  it  or  bought  it 
with  what  he  did  make;  it  is  in  the  nature  of 
wages,  or  would  be  if  he  hadn't  a  cinch  in  other 
ways.  But  his  weal  in  the  capitalization  of  his 
farm  site  is  precisely  the  same  as  old  man  Samp- 
son's weal  in  those  valuable  building  lots  from 
which  he  gets  ground  rents — a  "rake-off"  weal. 

In  those  circumstances  the  economic  conflict  is 
between  weals  or  interests  which  ramify  personal 
classes,  instead  of  being,  as  under  feudalism,  a 
conflict  between  personal  classes.  To  be  sure, 
you  are  quite  right,  slavery  does  give  us  the  only 
perfect  exemplification  of  hostile  class  interests  in 
the  personal  sense — master  class,  slave  class,  and 
the  nondescript  masterless  class.  Under  feudal- 
ism, ramifying  impersonal  interests  as  distin- 
guished from  class  interests  creep  in  slightly,  and 
under  capitalism  survivals  of  distinct  class  interests 
are  observable;  but  characteristically,  feudalism 
involved  a  conflict  of  personal  classes,  whereas  cap- 
italism involves  a  conflict  of  impersonal  interests. 


CHAPTER  XIX. 
The  Social  Service  Law  of  Equal  Freedom. 

Once  more  at  Joseph's  restaurant,  Doctor,  at 
the  very  table  and  in  the  same  cozy  corner  where 
you  and  I  sat  more  than  a  year  ago  when  we  fell 
into  our  conversations  about  social  service,  I  feel 
that  there  could  be  no  occasion  more  fit  for  pull- 
ing together  the  odds  and  ends  of  our  talks  and 
considering  their  significance.  With  me,  as  I  hope 
with  you,  they  have  pointed  to  the  vital  impor- 
tance of  universal  conformity  to  the  natural  law 
of  equal  freedom. 

Pardon  me,  however,  if  I  caution  you  again  to 
observe  the  meaning  of  the  words  "natural  law" 
in  this  connection.  I  dislike  cautioning  you  over 
much,  but  those  words  don't  allude,  you  know,  to 
physics  merely,  nor  to  vegetation  merely,  nor  to 
animality  merely.  They  allude  to  human  associa- 
tion, and  to  all  that  this  implies.  Oh,  yes;  I 
know  of  the  objection  that  there  can  be  no  such 
thing  as  equal  freedom,  since  some  men  are  slaves 
to  evil  personal  habits  or  propensities.  But  I 
guess  you  and  I  don't  differ  about  the  shallowness 
of  that  objection.  It  is  the  favorite  pietistic  ex- 
pression, as  the  other  is  the  favorite  materialistic 
expression,  of  the  evil  spirit  of  hostility  to  the 
principle  of  equal  opportunities.  While  one  set  of 
special  pleaders  try  to  show,  by  unduly  narrowing 
the  sphere  of  natural  law,  that  there  is  no  natural 
law  demanding  equal  freedom,  the  other  set  try 
to  show  the  impossibility  of  equal  freedom  by 
irrelevant  references  to  men  who  are  slaves  to 


318  SOCIAL    SERVICE. 

their  own  vices.  What  folly  it  all  is — these  ef- 
forts to  make  excuses  and  warrant  for  man's  in- 
humanity to  man.  What  cruel  folly! 

Why,  Doctor,  in  asserting  the  principle  of  equal 
freedom,  we  do  not  allude  to  personal  habits  or 
propensities  which  hold  individuals  in  metaphori- 
cal slavery  to  themselves.  Nor  in  asserting  that 
equal  freedom  is  a  natural  law,  do  we  allude  to 
the  natural  laws  that  govern  insentient  matter  or 
jungle  life.  You  understand  that,  don't  you? 
What  we  allude  to  is  something  very  different. 
The  natural  law  of  equal  freedom  its  a  law  with 
reference  to  human  nature  in  certain  Imman  rela- 
tionships. It  is  not  a  law  of  physics  alone,  nor  of 
personal  character  alone;  but  of  the  tendencies 
of  human  nature  in  the  phenomena  of  industrial 
co-operation. 

There  is  no  more  of  lawless  chance  in  the 
social  realm  than  in  the  physical  realm.  Don't 
you  agree?  From  like  conditions  come  like  re- 
sults, here  as  in  every  other  sphere  of  scientific 
observation.  Industrial  co-operation  springs  from 
and  proceeds  in  conformity  to  impulses  of  human 
nature,  with  the  uniformity  of  cause  and  effect. 
There's  no  denying  it,  Doctor.  This,  then,  is  a 
natural  law — a  social  law.  Whoever  ventures  to 
dispute  it  may  be  instantly  confounded,  merely  by 
reference,  as  an  illustrative  example,  to  the  mani- 
fest natural  human  tendency  toward  what  we 
call  "division  of  labor,"  the  results  of  which  are 
more  or  less  bountiful  as  we  yield  more  or  less 
freely  to  it. 

From  recognition  of  that  uniform  experience 
of  all  time,  the  benefits  of  "division  of  labor,"  to 
the  acknowledgment  of  equal  freedom  in  human 
association  as  a  natural  law,  there  is  but  a  step. 
Agree  or  not  as  you  please,  my  dear  Doctor,  the 
conclusion  is  certain  to  haunt  you,  that  the  nearer 
human  association  approximates  to  a  condition 


EQUAL  FREEDOM.  318 

of  equal  freedom — and  this  means  complete  free- 
dom, of  course,  for  where  all  are  equally  free, 
each  must  be  superlatively  free — the  nearer  this 
condition  of  freedom  from  the  domination  of 
others  is  approximated,  I  say,  the  greater  will  be 
the  beneficial  results  of  human  association.  At 
any  rate  that  is  what  I  mean  by  the  social  service 
law  of  equal  freedom. 

The  certainty  that  this  is  a  natural  law,  and 
the  vital  importance  of  conforming  to  it  speedily 
in  some  sensible  way,  may  become  clearer  to  you 
if  we  briefly  run  over  the  line  of  thought  we 
have  been  pursuing  this  year  or  so.  For  all  our 
talks  since  our  first  one  at  Joseph's  table  here 
have  borne  directly  upon  this  very  law  of  human 
association — this  law  that  Henry  George  inter- 
prets into  economics  as  the  law  of  "co-operation 
in  equality."  Those  talks  have  led  straight  to 
the  point  we  have  come  to  now. 

If  the  talks  were  prolix  sometimes,  it  was  be- 
cause I  wished  to  furnish  food  for  your  own 
thought  largely,  rather  than  to  give  you  my 
thought  in  little  capsules;  and  if  they  were  often 
boresome,  that  was  because  one  must  be  a  little 
boresome,  mustn't  he?  when  he  is  trying  to  get 
another  to  see  what  he  thinks  he  sees  clearly  him- 
self, but  what  the  other  doesn't  see  at  all — most 
likely  because  he  isn't  looking  at  it. 

Well,  to  go  back  to  that  first  talk  of  ours  at 
this  table,  what  was  the  main  thought  that  we 
got  out  of  it?  Wasn't  it  the  interrelation  or  uni- 
fication or  mutualization  of  service?  We  made 
ourselves  realize — didn't  we  ? — that  even  the  sim- 
plest of  human  wants  in  civilized  life,  a  want  so 
simple  and  so  easily  satisfied  as  a  dinner  at  the 
time  when  and  the  place  where  you  want  it,  is 
supplied  only  by  a  boundless  and  complex,  aye 
and  incessant,  interchange  of  individual  services. 

Later  on  in  our  talks  we  learned  to  recognize 


320  SOCIAL,    SERVICE. 

this  boundless  complexity  of  services  by  the  term 
that  political  economists  use,  which  is  "division 
of  labor."  We  learned  also  that  these  complex 
interchanges  of  service  are  effected  by  means  of 
tokens  called  money,  and  through  book  accounts 
expressed  in  terms  of  money.  Yet  we  saw  that 
the  whole  matter,  be  the  use  of  money  and  of 
money  terms  never  so  misleading,  be  the  inter- 
changes they  "keep  tab  on"  never  so  intricate, — 
we  saw  that  notwithstanding  all  this,  the  condi- 
tion back  of  the  money,  back  of  book  accounts, 
back  of  banks  and  checks  and  drafts  and  clearing 
houses,  is  nothing  but  an  exchange  of  commodi- 
ties for  commodities.  And  didn't  we  find  further, 
in  so  far  as  the  commodities  exchanged  were  artifi- 
cial,— were  produced  by  art,  or  industry,  or  skill,  or 
labor,  or  whatever  you  choose  to  call  it — to  that  ex- 
tent didn't  we  find  that  the  condition  is  in  the  last 
analysis  only  an  exchange  of  labor  for  labor,  of 
human  service  for  human  service.  In  other  words, 
upon  analyzing  money  transactions  we  found — 
didn't  we? — that  money,  in  its  legitimate  uses,  is 
merely  a  certificate  of  service  rendered  by  its 
possessor,  which  is  redeemable  upon  presentation 
in  the  social  service  market  in  service  rendered  for 
its  possessor. 

Proceeding  from  that  conclusion,  we  next  came 
to  the  realization  of  a  still  more  fundamental  fact. 
We  realized  that  the  primary  human  impulse  to 
social  service  is  the  natural  human  desire  for  self 
service.  Each  serves  others  because  that  is  the 
easiest  way  of  serving  himself.  Human  energy, 
like  all  other  forms  of  energy,  moves  along  the 
line  of  least  resistance.  And  as  the  normal  line 
of  least  resistance  for  satisfying  one's  own  desires 
in  the  social  state  is  the  line  along  which  one  can 
help  others  to  satisfy  their  desires,  we  are  willing 
to  serve  them — not  as  a  bit  of  neighborliness  now 
and  then,  but  as  a  matter  of  business  day  by  day, 


EQUAL.  FREEDOM.  321 

giving  our  services  to  others  in  exchange  for  the 
services  of  others  to  us.  Thus  it  is,  we  saw,  that 
industrial  co-operation  springs  naturally  out  of 
individual  wants. 

It  was  this  natural  co-operation,  you  remem- 
ber, that  enabled  you  and  me  to  get  a  dinner  at 
Joseph's  just  when  we  wanted  it — a  dinner  such 
as  neither  of  us  could  have  got  for  ourselves 
though  we  had  worked  at  it  a  thousand  years.  Yet 
we  did  get  it  ourselves — in  a  sense  we  did,  you 
know,  and  very  easily.  In  that  highly  important 
sense  we  ourselves  made  that  dinner, — and  we 
made  this  one  too  which  we  have  just  finished — 
made  them  both,  from  crockery-ware  to  sugar 
lump,  by  trading  our  services  to  individuals  who 
wanted  them,  in  exchange  for  the  services  which 
an  army  and  navy  of  workers  had  done  in  order 
to  provide  these  dinners,  the  whole  thing  being 
balanced  off  by  means  of  money  tokens  and  a  maze 
of  book  accounts.  Complex  as  all  the  intervening 
transactions  were,  you  and  I  did  in  very  truth  get 
our  own  dinners  here  with  our  own  work. 

When  we  had  fairly  realized  that  industrial 
life  consists  in  an  interchange  of  services  along 
the  line  of  least  resistance,  we  looked,  as  you  will 
recall,  for  the  regulator  which  guides  individuals 
in  so  rendering  service  to  others  in  one  form  as  to 
get  service  from  others  in  many  forms;  and  we 
found  it  in  the  relation  of  money  terms  to  service. 
Higher  prices  for  a  particular  service,  other  con- 
siderations being  the  same,  draw  service  in  that 
direction.  But  as  money  expresses  only  a  condi- 
tion, and  is  not  the  condition  itself,  we  sought 
further  and  found  that  the  ultimate  regulator  is 
what  political  economists  call  "the  law  of  supply 
and  demand" — the  law  that  the  general  demand 
for  service  determines  the  general  direction  of 
service. 

Of  course  that  conclusion  brought  up  the  ques- 


322  SOCIAL    SERVICE. 

tion  of  competition,  which  had  long  been  a  moot 
point  between  you  and  me.  But  I  guess  you  are 
satisfied,  aren't  you  ?  that  competition  as  I  use  the 
word,  and  as  I  have  the  right  to  use  it,  is  really 
the  life  principle  of  industrial  co-operation.  For 
I  didn't  use  the  word,  you  remember,  as  you  had 
used  it  before,  nor  as  our  socialist  friend  uses  it, 
nor  as  Slim  Jim  Pulsifer  uses  it.  Competition, 
as  I  use  the  word,  is  the  antithesis  of  monopoly. 

It  is  hardly  necessary  to  do  more  than  repeat — 
is  it  ? — that  the  word  is  not  the  thing,  but  that  the 
thought  is  the  thing.  I  don't  care,  you  know, 
whether  you  say  "competition,"  or  "emulation," 
or  something  else.  The  point  that  I  do  care  for 
is,  first,  that  you  recognize  such  a  social  force  as 
monopoly,  and,  second,  that  you  recognize  such  a 
social  force  as  the  opposite  of  monopoly. 

Now  you  may  call  this  force  that  is  opposite  to 
monopoly  by  any  name  you  please.  You  may  call 
it  "co-operation,"  provided  you  don't  limit  its 
meaning  to  co-operative  stores  and  the  like,  but 
make  it  as  broad  as  the  world  of  industrial  inter- 
changes. For  myself,  I  prefer  to  call  it  "competi- 
tion" because  it  has  in  it  normally  an  element  of 
emulation,  which  the  word  competition  suggests. 

If  in  our  social  service  activities  we  compete  to 
get  the  most  service  for  the  least,  we  shall  all  find 
ourselves  offering  to  take  least  for  most,  provided 
our  competition  is  in  a  social  environment  of 
equal  freedom.  The  efforts  of  all  to  get  most  for 
least  as  producers  of  service,  and  to  give  least  for 
most  as  consumers  of  service,  generate  conflicting 
social  forces.  Yes,  I  know  that  I  state  the  same 
thing  in  two  forms  when  I  speak  of  getting  most 
for  least  and  giving  least  for  most;  but  the  point 
is  that  those  two  statements  do  express  the  origin 
of  two  opposing  social  forces — the  force  that  pro- 
ceeds from  the  buying  impulse,  and  the  force  that 
proceeds  from  the  selling  impulse.  Those  two 


EQUAL,  FREEDOM.  323 

forces,  operating  in  freedom,  tend  through  com- 
petition to  an  equilibrium  at  the  point  of  fair 
exchange.  Competition  in  the  social  service  mar- 
ket is  like  air  pressure,  you  must  remember;  if  it 
bears  only  upon  one  side  it  destroys  equilibrium, 
but  if  it  bears  equally  upon  all  sides  it  maintains 
equilibrium. 

It  was  right  here,  Doctor,  that  we  detected,  as 
you  will  remember,  the  disturbing  effect  upon 
free  competition  of  the  influence  of  special  privi- 
leges, which  are  monopoly  forces.  Whenever  they 
come  in,  they  exclude  competition  to  that  extent ; 
and  to  that  extent  the  industrial  equilibrium  is 
destroyed. 

This  situation  we  found  in  feudal  society. 
Landlordism  had  destroyed  competition  and  re- 
duced labor  to  serfdom.  Instead  of  giving  serv- 
ice for  service,  the  landless  under  feudalism  gave 
service  for  permission  to  serve.  Industrial  com- 
petition was  throttled  by  a  privileged  class. 

We  found  essentially  the  same  condition  in  our 
present  capitalistic  society.  Industrial  competi- 
tion is  throttled,  not  exactly  by  a  privileged  class, 
but  by  privileged  interests.  As  landlordism  de- 
stroyed competition  once  by  reducing  labor  to 
serfdom,  so  land  capitalism  destroys  competition 
now  by  reducing  labor  to  what  our  socialist  friend 
aptly  enough  calls  "wage  slavery/* 

It  is  surely  as  we  agreed,  Doctor,  that  there  are 
only  two  ways  of  regulating  co-operative  service — 
that  worldwide  social  service  which  springs  from 
individual  desires  for  self  service.  One  way  is 
by  monopoly;  the  other  is  by  competition.  Mo- 
nopoly is  pathological,  and  socially  destructive; 
but  competition  in  freedom  is  wholesome  and  so- 
cially constructive.  Whenever  competition  is  de- 
structive it  is  because  it  is  not  free,  because  ele- 
ments of  monopoly  enter  in,  because  some  of  us 
have  special  privileges  which  give  an  advantage 


324  SOCIAL    SERVICE. 

over  others  in  making  exchanges  of  service — an 
advantage  which  enables  the  privileged  to  get  most 
for  least  and  compels  the  others  to  take  least  for 
most. 

After  we  had  seen  this  much  in  the  course  of 
our  talks,  Doctor,  we  started  out,  as  you  will  re- 
call, upon  a  conversational  inquiry  into  the  causes 
of  monopoly  in  the  midst  of  conditions  apparently 
competitive.  We  sought  for  the  seat  of  this  dis- 
order in  the  social  organization,  sought  for  the 
apertures  through  which  monopoly  had  found  en- 
trance into  a  competitive  social  service  market, 
for  an  explanation  of  the  pathology  of  the  social 
service  organism ;  and  we  hegan,  rightly  enough  as 
I  guess  you  agree,  with  an  examination  into  the 
mechanism  of  social  service,  meaning  hy  this 
mechanism  what  is  indicated  hy  the  word  ''busi- 
ness," but  business  in  the  broadly  inclusive  sense 
of  all  kinds  of  social  service. 

By  that  inquiry  we  were  carried  somewhat  into 
the  practical  intricacies  of  trading.  And  there 
we  saw  how  the  social  line  of  least  resistance  op- 
erates, tinder  the  law  of  supply  and  demand,  to 
compel  every  one  who  pays  his  way  in  the  world 
with  his  own  work,  to  produce  his  own  wages,  his 
own  earnings,  in  some  form,  before  he  gets  them 
in  any  form.  We  were  thus  able  to  realize  that 
in  effect  all  workers  produce  their  own  wages  in 
the  form  in  which  they  consume  them. 

In  this  connection  also  we  saw  how  competition 
operates  as  the  motor  force  of  business  under  cap- 
italism to  compel  a  square  deal  among  workers, 
provided  the  competitive  forces  operate  freely — 
provided,  that  is,  that  the  competition  is  not  one- 
sided but  all-sided. 

It  waj3  in  this  connection,  too,  that  the  func- 
tions of  money  came  again  in  evidence,  for  money 
is  a  business  medium  and  its  language  the  Ian- 


EQUAL  FREEDOM.  335 

guage  of  business.  So  we  took  a  glimpse  at  the 
mechanism  of  banking. 

It  was  also  right  here,  as  you  doubtless  remem- 
ber, that  we  made  our  analysis  of  profits.  Don't 
you  recollect  how  we  found  "profits"  to  be  a  dan- 
gerously ambiguous  term — a  term  which  includes 
not  only  "rake-off,"  which  is  plunder,  but  also 
earnings,  which  are  fair  and  honest.  A  boy  buys 
newspapers  at  wholesale — you  recognize  our  illus- 
tration, don't  you? — he  buys  papers  at  wholesale 
for  a  cent  apiece,  for  instance,  and  sells  them  for 
two.  So  he  has  made  a  "profit"  of  one  cent.  But 
"profit"  in  his  case  means  earnings  or  wages,  for 
he  has  earned  his  profit  by  serving  people  with 
papers.  On  the  other  hand,  a  man  buys  a  vacant 
lot,  for  instance,  for  five  hundred  dollars,  and 
later  on,  merely  because  that  locality  has  become 
a  more  important  social-service  center  than  be- 
fore, he  sells  it  for  a  thousand  dollars.  The  man 
also  has  made  a  "profit" — a  profit  of  five  hundred 
dollars.  But  profit  in  his  case  doesn't  mean 
earnings  as  it  did  in  the  newsboy's  case.  Nor 
does  this  depend  upon  the  difference  in  amount. 
It  depends  upon  the  fact  that  the  man  has  served 
no  one.  So  far  from  serving,  he  has  obstructed. 
He  has  obstructed  builders  by  holding  a  much- 
desired  part  of  the  planet  out  of  use  for  a  higher 
price.  Whereas  the  boy's  "profit"  was  earnings  for 
service,  the  man's  "profit"  is  "rake  off"  for  inter- 
fering with  service. 

You  saw  then,  Doctor,  that  "profit"  is  too  am- 
biguous a  term  for  thinking  purposes,  and  no 
doubt  you  see  it  yet.  The  confusion  arises  out  of 
that  fundamental  confusion  in  capitalism  which 
we  have  talked  over.  I  allude,  as  you  doubtless 
infer,  to  the  confusion  in  the  social  service  mar- 
ket of  land  with  the  products  of  labor  from  land. 
These  are  treated  as  if  they  were  commodities  of 
like  character,  when  in  fact  they  are  essentially 


336  SOCIAL  SERVICE. 

as  different  under  capitalism  as  they  were  under 
feudalism.  A  similar  confusion  extends  to  spe- 
cial privileges  when  they  come  as  commodities  into 
the  social  service  market.  In  fact,  nearly  all  spe- 
cial privileges  are  but  different  forms  of  land 
monopoly,  such  as  rights  of  way  over  land.  Those 
that  are  not  strictly  land  monopoly,  such  as  pat- 
ents, are  of  the  same  elementary  nature, — for  all 
privileges  originate  in  the  exercise  of  the  sover- 
eign power  of  the  state  in  behalf  of  some  folks 
and  against  others. 

But  we  must  hurry  on.  It  was  by  inquiries 
such  as  those  I  am  reminding  you  of,  that  we  came 
in  our  talks  to  an  understanding  of  the  derange- 
ments of  the  mechanism  of  social  service;  or,  as 
we  had  been  accustomed  to  say,  of  the  pathology 
of  the  social  organism;  or,  as  we  might  now  say, 
and  perhaps  more  pointedly  and  significantly,  of 
the  pathology  of  capitalism.  And  you  will  agree, 
won't  you?  that  our  inquiry  revealed  the  seat  of 
the  disorder.  Don't  you  think  that  he  who  con- 
trols the  instruments  of  production  that  are  neces- 
sary in  social  service,  controls  both  product  and 
producer?  "Well,  •ftiat  suggests  the  seat  of  the 
disorder  as  our  inquiry  revealed  it. 

But  we  couldn't  stop  there — not  as  rational  in- 
quirers. Having  found  that  monopoly  of  the  in- 
struments of  production  constitutes  the  evil  power 
of  capitalism,  it  became  necessary  to  ascertain 
whether  this  is  true  of  all  kinds  of  instruments  of 
production  or  only  of  some  kinds.  Common  sense 
demanded,  in  other  words,  that  we  should  analyze 
and  classify  the  instruments  of  production  which 
are  characteristic  of  capitalism,  in  order  to  see 
whether  in  the  last  analysis  the  evils  of  capitalism 
are  fundamentally  due  to  monopoly  of  all,  or  to 
monopoly  of  only  some,  kinds  of  instruments  of 
production.  For  it  may  be,  you  know,  that  th« 
monopoly  of  all  kinds,  and  the  evil  effects  thereof, 


EQUAL   FREEDOM.  327 

proceed  from  and  are  dependent  upon  the  monop- 
oly of  only  some  kinds. 

What  difference  does  it  make?  Can  you  ask 
that  now?  Why  it  makes  all  the  difference  in 
the  world  when  you  come  to  remedies. 

If  the  fundamental  trouble  with  capitalism  is 
monopoly  of  all  kinds  of  capital,  of  all  kinds  of 
instruments  of  production,  then  our  socialist 
friend  is  right.  In  that  case  the  necessary  rem- 
edy is  his  demand  for  the  abolition  of  private  own- 
ership of  all  kinds.  But  if  the  fundamental  trou- 
ble with  capitalism  is  monopoly  of  only  some 
kinds  of  capital,  the  monopolization  of  the  rest 
being  an  effect  before  it  becomes  a  cause,  then  our 
socialist  friend  is  wrong.  His  remedy  is,  in  that 
event,  not  necessary  in  its  entirety.  If  adopted 
in  its  entirety  it  might  make  new  evils  instead  of 
eradicating  old  ones.  Our  best  remedy  would  be 
to  abolish  the  monopoly  of  those  kinds  of  capital, 
of  those  kinds  of  instruments  of  production,  that 
make  the  monopoly  of  the  other  kinds  possible. 
Should  this  prove  enough  for  the  purpose  of  se- 
curing equal  freedom,  why  go  any  further?  You 
wouldn't  keep  on  giving  medicine,  would  you,  to 
a  patient  you  had  already  completely  cured  ?  And 
you  wouldn't  bother  about  secondary  causes  of  a 
bodily  disease,  would  you,  if  you  could  get  at  the 
primary  one  ?  But  if  removal  of  the  primary  mo- 
nopoly proved  to  be  not  enough?  Well,  that's 
hardly  thinkable;  but  in  that  case  we  should  at 
any  rate  know  much  better  than  we  do  now  what 
the  next  step  ought  to  be  and  how  to  take  it. 

Do  we  understand  each  other  now,  Doctor? 
All  right.  Since  then  we  realize  the  practical 
importance  of  the  analysis,  let  me  remind  yon  of 
the  further  points  in  the  inquiry  we  were  making 
in  our  talks. 

Having  fixed  upon  the  point  that  he  who  con- 
trols the  instruments  of  production  necessary  in 


328  SOCIAL    SERVICE. 

social  service  thereby  controls  both  products  and 
producers,  we  proceeded  to  analyze  and  classify 
the  instruments  of  production.  We  went  on,  that 
is,  to  ascertain  the  essential  characteristics  of  the 
different  kinds  of  capital  if  any  such  there  might 
be.  And  what  did  we  find?  We  found  that  in 
the  last  analysis  there  are  two  absolutely  different 
kinds  of  capital — different  in  origin,  different  in 
economic  character,  different  in  industrial  quality. 
We  found,  that  is,  that  some  kinds  of  capital  are 
natural,  and  that  other  kinds  are  artificial, — nat- 
ural sources  and  sites,  and  artificial  products. 

The  only  thing  which  these  two  kinds  of  capital 
have  in  common  is  value  in  the  social  service  mar- 
ket. But  we  had  already  seen  that  market  value 
in  common  cannot  make  different  things  essen- 
tially identical.  Terms  of  value  are  only  modes 
of  measurement  in  exchange.  We  wouldn't  say 
that  a  pound  of  lead  and  a  pound  of  feathers  are 
the  same  because  they  have  weight  in  common. 
Then  why  say  that  a  dollar's  worth  of  natural 
coal  deposit  and  a  dollar's  worth  of  artificially 
produced  coal  at  the  distant  coalyard,  are  the  same 
because  they  have  value  in  common?  The  deter- 
mining element  in  classifying  different  kinds  of 
capital  is  not  weight  nor  value.  If  you  need  a 
pound  of  lead,  a  pound  of  feathers  won't  do;  if 
you  need  a  dollar's  worth  of  natural  opportunity 
to  mine  coal,  a  dollar's  worth  of  artificial  coal- 
mining machinery  won't  answer  the  purpose.  The 
fact  that  you  personally  might  swap  mining 
machinery  for  mining  opportunity  might 
serve  your  own  temporary  use;  but  it 
makes  little  difference  when  you  get  down 
to  a  consideration  of  the  relation  of  all 
natural  coal  deposits  to  all  artificial  coal-mining 
machinery,  and  none  at  all  when  you  get  around 
to  considering  the  relation  of  this  natural  planet 
to  the  artificial  capital  which  is  drawn  from  and 


EQUAL  RFEEDOM.  329 

to  be  used  upon  the  planet.  In  that  broad  in- 
quiry, the  common  element  of  value  ceases  to 
identify.  Our  analysis  and  synthesis  must  extend 
to  the  objects  themselves  as  distinguished  from 
their  value. 

Those  who  own  the  planet  among  them  are 
masters  of  everybody  else.  Those  whose  interests 
are  in  natural  capital  dominate  those  whose  in- 
terests are  in  artificial  capital.  Even  if  value  be 
an  element  which  the  two  kinds  of  capital  have  in 
common,  the  value  relation  varies.  As  artificial 
capital  increases  in  effectiveness,  its  value  rela- 
tively to  natural  capital  falls.  All  experience 
proves  this.  If  you  prefer  the  converse  form  of 
statement,  the  value  of  natural  capital  relatively 
to  artificial  capital  rises  as  the  latter  becomes 
more  effective.  How,  then,  could  there  be  any 
reasonable  escape,  if  we  would  rationally  consider 
the  natural  laws  of  social  service,  from  the  neces- 
sity of  distinguishing  the  capital  that  is  artificial 
from  that  which  is  natural? 

As  we  proceeded  with  the  inquiry  which  had  led 
us  to  that  conclusion,  you  will  remember  that  we 
came  to  a  further  conclusion.  It  was  an  unavoid- 
able one,  don't  you  think?  I  mean  the  conclu- 
sion that  the  control  of  natural  capital,  of  the 
natural  and  unreproducible  source  of  all  produc- 
tion, of  our  natural  environment,  of  the  planet 
itself, — that  this  control,  and  not  control  of  the 
artificial  and  reproducible  products  of  human  art 
and  skill  drawn  forth  from  the  planet,  is  the  kind 
of  monopoly  that  primarily  disorders  the  social 
service  market;  that  this  is  what  makes  workers 
dependent  upon  capitalists  for  opportunities  to 
work,  and  emasculates  their  natural  ability  to  ex- 
act service  for  service. 

Yes,  we  did  agree,  I  think,  that  monopoly  of 
the  artificial  instruments  of  production  is  in  fact 
a  cause  of  the  social  disease.  If  we  didn't  we 


330  SOCIAL    SERVICE. 

will  now,  for  it  is  true  enough.  But  we  agreed 
also,  or  should  have  done  so,  that  this  cause  is 
itself  an  effect  of  the  deeper  cause.  The  monop- 
oly of  those  labor  products  is  an  effect  of  monop- 
oly of  the  natural  sources  and  sites  for  labor  en- 
ergy. In  so  far  as  monopoly  of  artificial  instru- 
ments of  production  is  socially  injurious,  it  is  due 
to  monopoly  of  natural  instruments  of  production. 
To  translate  this  conclusion  into  terms  more  ap- 
propriate to  capitalism,  we  may  properly  say,  as 
I  have  done  occasionally,  that  monopoly  of  artifi- 
cial capital  is  caused  by  monopoly  of  natural  cap- 
ital. 

And  doesn't  that  express  the  exact  truth?  If 
we  state  our  diagnosis  of  the  social  disease  in 
the  briefest  capitalistic  terms,  shall  we  not 
have  to  say  that  the  cause  is  monopoly  of  nat- 
ural capital?  The  same  idea  would  have  been 
expressed  by  the  old  economists,  influenced  as 
they  were  by  customs  and  forms  of  speech  that 
are  more  or  less  survivals  of  feudalism,  in  some 
such  phrase  as  that  the  cause  of  the  social  disease 
is  monopoly  of  land.  But  inasmuch  as  in  most 
parts  of  the  world  land  is  now  capitalized  and 
treated  in  the  social  service  market  as  a  commod- 
ity along  with  the  other  instruments  of  capitalis- 
tic production,  we  may  secure  greater  clearness 
and  a  better  and  wider  understanding  if  we  at- 
tribute the  cause  to  monopoly  of  the  natural  in- 
struments of  production ;  or,  in  capitalistic  phrase, 
to  monopoly  of  natural  as  distinguished  from  ar- 
tificial capital. 

Come  back  with  me  now,  Doctor,  to  our  natural 
law  of  equal  freedom  in  social  service, — in  the  nat- 
ural social  service,  that  is,  which  originates  in 
and  is  maintained  by  the  natural  individual  de- 
sire for  self-service. 

The  reason  that  we  have  social  disease  under 
capitalism  is  essentially  the  same  as  the  reason 


EQUAL,  FREEDOM.  331 

they  had  it  under  feudalism.  If  the  planet  had 
been  held  by  feudal  landlords  truly  in  trust  for 
the  common  good,  so  that  the  law  of  equal  free- 
dom could  have  operated,  feudal  landlordism 
•would  not  have  been  so  bad.  It  would  have  been 
a  crude  form  of  land  communism.  All  the  people 
would  have  shared  fairly  in  the  general  benefits  of 
the  time,  while  each  would  have  had  the  particu- 
lar benefits  of  his  own  individual  service.  It  was 
not  landlordism  that  hurt  under  feudalism;  it 
was  the  perversion  of  landlordism  from  a  public 
trust  to  a  private  monopoly. 

No,  no,  Doctor,  I  am  not  alluding  to  the  arbi- 
trary power  of  the  military  features  of  feudalism. 
They  constituted  a  species  of  man-ownership,  and 
owning  men  is  one  of  the  forms  of  slavery,  as 
monopoly  of  land  is  the  other;  we  have 
been  over  that  ground,  you  know.  What  I 
allude  to  now  is  only  the  economic  fea- 
tures of  feudalism;  although  it  is  my  firm 
conviction  that  equal  freedom  with  refer- 
ence to  land  would  have  greatly  modified  if  not 
wholly  eradicated  the  severity  even  of  those  mili- 
tary features.  But,  recurring  to  our  point,  let  me 
repeat  and  with  emphasis,  that  the  evil  of  land- 
lordism during  the  feudal  regime  was  not  land- 
lordism itself.  It  was  the  perversion  of  landlord- 
ism from  a  public  trust  to  a  private  usurpation, 
whereby  the  benefits  of  social  progress  were  di- 
verted from  the  people  to  the  usurping  trustees. 

So  now  under  capitalism.  If  the  planet  were 
capitalized  for  the  good  of  all,  instead  of  being 
capitalized  for  the  profit  of  its  capitalistic  owners, 
capitalism  would  not  be  a  bad  thing.  Indeed, 
Doctor,  I  think  it  might  be  a  very  good  thing. 
Perhaps  I  may  go  further  and  say,  as  I  believe, 
that  in  those  circumstances  capitalism  would  be 
the  best  possible  system  of  social  service. 

The  reason  I  believe  so?    Because  I  think  that 


332  SOCIAL    SERVICE. 

capitalism,  if  the  capitalization  of  land  were  a 
common  fund  instead  of  a  private  fund,  would 
establish  substantial  economic  justice.  How? 
By  securing  to  each,  on  the  one  hand,  the  service 
of  others  in  proportion  to  his  contribution  of  serv- 
ice to  others ;  and  by  securing  to  all,  on  the  other 
hand,  an  equal  share  in  the  benefits  of  social 
growth.  It  would  do  this  because  it  would  be  in 
strict  conformity  to  the  social  service  law  of  equal 
freedom.  You  think  me  dogmatic?  Very  likely 
I  am,  but  this  is  merely  a  statement  of  what  I  in- 
tend to  prove. 

The  law  of  equal  freedom  in  the  social  service 
market  means,  as  I  have  already  asked  you  to 
note,  that  each  shall  have  full  freedom  to  satisfy 
his  own  desires,  within  the  limitation  that  he  in- 
vade no  one  else's  freedom  to  satisfy  his  desires. 
The  equilibrium  is  necessarily  equality  of  oppor- 
tunity. Isn't  that  so? 

And  it  implies  two  things,  as  I  think  you  will 
also  concede.  From  the  idealistic  standpoint  it 
implies  recognition  of  the  doctrine  of  natural 
rights;  from  the  utilitarian  standpoint  it  implies 
the  best  results. 

You  may  look  at  the  law  of  equal  freedom  as 
if  you  were  a  narrow  Eighteenth  century  believer 
in  natural  rights,  who  pays  no  attention  to  prac- 
tical results;  or  as  a  reactionary  utilitarian,  who 
neither  cares  for  nor  believes  in  natural  rights; 
or  as  a  true  idealist,  and  therefore  also  a  true  util- 
itarian, who  believes  that  utilitarianism  and  the 
doctrine  of  natural  rights  are  but  two  phases  of 
the  same  thing. 

I  don't  care  how  you  regard  this  law  of  equal 
freedom  in  those  controversial  aspects.  The  point 
I  make  to  you,  if  you  are  only  an  idealist,  is  that 
equal  freedom  is  recognition  of  natural  rights. 
The  point  I  make  if  you  are  only  a  utilitarian,  is 
that  equal  freedom  produces  the  best  results.  The 


EQUAL  FREEDOM.  333 

point  I  make  if  you  see  the  identity  of  true  ideals 
and  worthy  utilities,  is  that  equal  freedom  is  the 
shield  of  which  they  are  the  two  inseparable  sides. 
It  is  the  natural  law  of  which  ideality  is  the  active 
principle  and  good  results  the  fruit. 

Now,  it  seems  to  me  that  the  law  of  equal  free- 
dom, which  I  regard  as  a  natural  social  law  by 
every  test  of  what  constitutes  natural  law  that 
you  can  put  it  to — it  seems  to  me,  I  say,  that  this 
natural  law  points  to  capitalism  as  a  natural  form 
of  that  universal  industrial  co-operation  which  we 
have  called  social  service.  Aye,  and  I  am  rather 
inclined  to  believe  that  capitalism  is  not  only  a 
form  of  social  service,  but  that  it  may  be  the  form 
of  social  service. 

Have  a  care,  though,  for  I  am  talking  of  capi- 
talism itself,  and  not  of  its  perversions.  Unper- 
verted  capitalism  is  not  bad.  Unperverted  capi- 
talism seems  to  me  to  be  good.  No,  not  good  for 
special  beneficiaries,  for  unperverted  capitalism 
would  have  no  other  beneficiaries  than  those  who 
pay  their  way  in  the  world  with  their  own  service. 
It  would  be  good  for  us  all.  And  whether  or  not 
unperverted  capitalism  is  the  best  form  of  social 
service  we  ever  shall  have,  it  is  certainly  the  best 
we  ever  have  had.  It  is  the  best,  moreover,  that 
we  are  likely  to  have  at  any  time  not  very  remote. 
It  is  the  best  besides  that  we  can  have,  within  any 
such  time, — except  through  destructive  revolu- 
tions that  would  be  as  likely  to  send  us  backward 
as  forward.  I  will  go  a  little  further,  Doctor, 
and  say  that  unperverted  capitalism  is  the  best 
form  of  social  service  that  has  ever  been  suggested. 
And  I  say  this  with  most  kindly  consideration  for 
the  proposals  of  our  socialistic  friend  and  for 
those  of  our  communistic  friend.  For  capitalism 
unperverted  utilizes  the  self  interest  of  each  in 
normal  ways  for  the  good  of  all.  Although  it  may 
in  time  give  way  to  a  better  form  of  social  service, 


334  SOCIAL  SERVICE. 

it  is  more  likely  to  do  this  through  the  steady 
processes  of  evolution  from  a  cruder  to  a  better 
capitalism,  than  through  revolution  or  out  of 
premature  decay. 


CHAPTER  XX. 

Application  of  the  Law  of  Equal  Freedom. 

True  enough,  true  enough,  capitalism  has  in 
fact  subordinated  the  interests  of  all  to  the  greed 
of  a  few,  as  our  socialistic  friend  says.  But  that 
is  not  capitalism  per  se.  That  is  not  capitalism 
in  and  of  itself.  That  is  perverted  capitalism.  I 
am  talking  of  capitalism  unperverted;  remember 
that — unperverted,  unperverted. 

No,  not  at  all ;  I  don't  allude  to  perversions  by 
individuals.  A  man  may  rob  a  hen  roost,  thereby 
diverting  one  kind  of  wealth  from  its  owner; 
or  may  bribe  officials,  thereby  diverting  oth- 
er kinds  of  wealth;  but  all  this  sort 
of  thing  is  mere  individual  rasoality.  What 
I  am  trying  to  do  is  to  distinguish  individ- 
ual from  institutional  perversions.  I  am  not 
thinking  of  tainted  money.  I  do  not  allude  to  any 
of  the  perversions  of  capitalism  which  the  com- 
munity wouldn't  tolerate  if  the  facts  were  known. 
These  are  not  the  perversions  that  make  capital- 
ism seem  like  a  social  ogre.  The  perversions  of 
capitalism  that  do  make  it  seem  so,  and  to  which 
I  do  allude,  are  the  institutional  perversions  that 
are  maintained  by  common  consent,  with  full  gen- 
eral knowledge  of  the  facts,  but  in  general  igno- 
rance of  their  industrial  effects  and  moral  signifi- 
cance. 

Were  it  not  for  these  institutional  perversions, 
Doctor,  I  really  believe  that  capitalism  would  pro- 
duce, in  a  normal  way,  through  orderly  evolution- 
ary processes,  under  the  regulation  of  the  social 
law  of  equal  freedom  operating  in  conjunction 


336  SOCIAL    SERVICE. 

with  the  individual  law  of  the  line  of  least  resist- 
ance— I  truly  believe  that  in  the  absence  of  those 
perverting  institutions,  capitalism  would  produce 
a  co-operative  commonwealth  of  social  service  in- 
finitely better  than  any  which  the  fondest  visions 
of  Utopian  dreamers  have  ever  revealed. 

By  evolutionary  processes,  I  say;  not  by  con- 
ventional contrivances.  Conventional  contrivances 
are  arbitrarily  coercive,  and  a  true  co-operative 
commonwealth  must  be  free  of  arbitrary  coercion. 
No  co-operative  commonwealth  would  be  free  in 
which,  or  over  which,  there  were  any  who  as  king, 
or  president,  or  governor,  or  committeeman,  or 
legislature  or  bureaucrat,  could  coerce  beyond  the 
point  of  preventing  each  from  invading  the  equal 
freedom  of  any  other. 

The  only  coercion  beyond  that  would  be  on  the 
basis  of  contract,  free  contract.  And  what  ob- 
jectionable coercive  power  could  there  be,  let  me 
ask,  if  all  the  parties  to  every  contract  were  gov- 
erned in  their  bargaining  only  by  their  own  re- 
ciprocal desires  and  the  necessity  of  leaving 
others  in  equal  freedom?  When  each  bargains 
freely  and  upon  an  equal  footing,  the  resulting 
coercion  must  be  equal.  When  the  motive  of  each 
is  the  betterment  that  a  free  contract  gives  to  both, 
and  not  the  exercise  by  either  of  any  power  due 
to  institutional  advantages  in  negotiation,  arbi- 
trary coercion  is  almost  unthinkable.  And  this  is 
the  distinctive  characteristic  of  capitalism  unper- 
verted. 

For  in  the  last  analysis  a  capitalistic  regime  is 
a  regime  of  contract.  As  all  things  in  the  social 
service  market  are  capitalized,  men  deal  in  them 
on  a  basis  of  value,  value  being  the  capitalistic 
measuring  rod  of  social-service  contracts,  just  as 
the  terms  of  value  are  the  capitalistic  language  of 
the  social  service  market.  The  whole  affair  is 
contractual,  don't  you  see  it  is? 


EQUAL,  FREEDOM    APPLIED.  337 

And  since  it  is  all  contractual,  don't  you  also 
see  that  our  objective  in  dealing  with  capitalistic 
evils  should  be  to  secure  conditions  of  contractual 
freedom?  Don't  you  see  that  equality  of  con- 
tractual status  is  the  underlying  necessity  ?  It  is 
the  truth,  Doctor;  it  is  the  truth.  Equal  con- 
tractual freedom  is  the  secret  of  beneficence  in 
capitalism;  unequal  contractual  freedom  is  the 
secret  of  such  malevolence  in  capitalism  as  per- 
verts it. 

Let  there  be  true  contractual  freedom  among 
individuals  for  the  interchange  of  services,  and 
capitalism  will  give  us  a  co-operative  common- 
wealth that  will  grow  better  as  it  grows  older. 
Let  the  present  contractual  inequalities  remain  in 
capitalism,  and  they  will  multiply  until  capital- 
ism develops  not  into  a  co-operative  common- 
wealth but  into  a  plutocratic  tyranny  inconceiv- 
ably worse  than  any  tyranny  of  which  we  know. 

Abolish  capitalism!  Why  that  would  be  to 
substitute  authority  for  contract.  Our  socialistic 
friend?  I  know  he  does — he  always  insists  that 
the  abolition  of  capitalism  would  promote  free- 
dom of  contract.  But  every  practical  suggestion 
I  have  ever  read  or  heard  of  for  abolishing  capi- 
talism certainly  does  involve  a  more  or  less  com- 
plete abolition  of  contractual  methods — absolutely 
complete  so  far  as  large  transactions  are  con- 
cerned. Isn't  it  true,  at  any  rate,  that  every  pro- 
posal our  friend  suggests  is  either  utopian,  in  the 
sense  of  being  dreamy  and  impracticable,  or  else 
is  so  arbitrary  that  no  room  for  free  contract  is 
left? 

And  so  it  is  with  him  as  to  abolishing  compe- 
tition. No,  I  shan't  go  into  that  question  again, 
except  to  ask  you  to  observe  that  the  choice  is  not 
between  competition  and  something  better.  It  is 
between  competition  and  bureaucratic  regulation. 
Bureaucratic  regulation  is  destructive  of  free  con- 


338  SOCIAL    SERVICE. 

tract  j  competition  is  of  the  essence  of  free  con- 
tract. 

In  his  indictments  of  capitalism,  however,  as 
distinguished  from  his  notions  of  reconstruction, 
our  socialistic  friend  has  no  thought  of  abolishing 
contract.  His  complaints  against  capitalism  are 
all  directed  not  at  the  element  of  free  contract  but 
at  the  element  of  inequality  of  contractual  condi- 
tions. In  other  words,  Doctor,  when  you  sweep 
away  our  friend's  book  patter  and  his  "soap  box" 
phrases,  and  probe  his  thought,  you  find  that  he 
and  I  are  pretty  close  together.  His  complaint 
is  really  not  against  capitalism.  That  term  is 
only  one  of  his  habituals,  like  "proletariat/'  "bour- 
geoisie," "wage-slave,"  and  so  on,  which  are  his 
"he-gods"  and  his  "she-devils."  It  is  not  really 
capitalism,  I  say,  that  he  condemns.  It  ip  the 
perversions  of  capitalism. 

Be  fair  enough  to  him  to  get  at  his  thought 
back  of  his  words.  Through  his  flood  of  social- 
istic terms  you  will  find  that  his  intellectual  guns 
are  really  leveled,  not  at  the  contractual  charac- 
teristic of  capitalism,  but  at  the  conditions  of 
privilege  which  destroy  freedom  of  contract — de- 
stroy it  by  investing  some  bargainers  with  con- 
tractual advantages  and  placing  others  at  con- 
tractual disadvantage.  And  if  you  follow  his  earn- 
est thought  with  sympathetic  thought  of  your  own, 
you  will  find,  as  I  think  I  have  found,  that  the 
capital  which  he  thinks  of  as  monopolistic  is  not 
every  kind  of  capital,  nor  even  every  kind  of  large 
capital,  but  natural  capital  as  distinguished  from 
artificial  capital. 

Yes,  I  know,  he  always  includes  large  ma- 
chinery, which  is  artificial,  of  course;  but  when 
you  get  him  down  to  specifications,  his  monopoly 
of  large  machinery  always  turns  out  to  be,  or  to 
depend  upon,  monopoly  of  land — except  as  it  may 
now  and  then  be  a  patent  monopoly,  or  some  other 


EQUAL  FREEDOM   APPLIED.  339 

form  of  governmental  franchise  which  is  at  bot- 
tom analogous  to  landed  franchises. 

What  we  need,  Doctor,  in  order  to  produce  a 
civilization  of  social  justice,  and  what  I  think  our 
friend  will  yet  agree  to,  is  not  the  abolition  of 
capitalism  with  its  ideal  of  free  competition  and 
free  contract,  but  the  abolition  or  readjustment 
of  institutions  which  pervert  capitalism. 

Only  the  other  day  I  was  talking  with  him  about 
his  program.  It  was  during  a  political  campaign. 
He  said  he  really  had  no  program  except  to  raise 
the  working  class  to  political  power.  "How  can  I 
foretell,"  he  asked,  "what  the  working  class  will  do 
when  it  gets  into  power?"  Of  course,  I  agreed 
that  he  couldn't  foretell  at  all.  Indeed,  I  agreed 
with  him  further.  I  agreed  that  the  working  class 
ought  to  be  in  power — meaning  by  working  class, 
you  understand,  not  a  personal  class  composed  of 
particular  grades  of  workers,  but  those  impersonal 
industrial  interests  of  all  degrees  that  may  be  dis- 
tinguished in  the  mass  as  working  interests  in  op- 
position to  privileged  interests.  But  I  told  him 
that  the  working  interest  cannot  get  into  power  as 
long  as  the  planet  is  monopolized.  "Let  me  have 
monopoly  of  the  planet,"  I  said  to  him,  "and  sin- 
gle handed  I'll  keep  the  great  army  of  labor  out 
of  political  power  till  the  crack  of  doom."  And  I 
reckon  I  could,  don't  you  ? 

To  return,  however,  to  what  we  were  saying. 
Something  very  different  from  the  abolition  of 
capitalism,  with  its  ideal  of  free  contract,  is  needed 
to  establish  social  justice.  What  is  needed  is  the 
abolition,  or  readjustment,  of  institutions  that  per- 
vert capitalism.  Let  me  follow  that  thought  a  littl« 
further.  We  should  not  abolish  contract,  which  is 
the  essential  characteristic  of  capitalism;  on  the 
contrary,  we  should  make  contract  free  by  remov- 
ing obstacles  and  securing  equality  of  contractual 
opportunities.  In  other  words,  we  should  release 


340  SOCIAL    SERVICE, 

capitalism  from  the  institutional  ligaments  that 
prevent  its  normal  operation. 

Quite  likely  you  are  right.  The  method  or 
methods  by  which  that  would  have  to  be  done 
would  be  socialistic.  I  don't  see  how  it  could  be 
done  by  leaving  things  alone.  Society  in  its  or- 
ganized form — government  if  you  please — would 
have  to  act ;  and  it  would  have  to  act  co-operative- 
ly, as  the  organized  agent  of  unorganized  society. 
A  true  saying  was  that  of  William  J.  Bryan  in  one 
of  his  non-partisan  speeches  in  1908 — that  govern- 
ment exhibits  two  influences,  the  coercive  and  the 
co-operative,  and  that  the  coercive  declines  and  the 
co-operative  advances  with  the  advance  of  the 
common  intelligence.  I  suppose  that  that  is  so- 
cialism in  a  sense.  So  is  what  I  should  propose 
for  the  redemption  of  capitalism  from  its  insti- 
tutional perversions.  It  is  socialism  in  a  sense. 

Understand  me,  however,  that  I  would  not  try 
to  appropriate  the  name.  "Socialism"  is  a  word 
that  has  obtained  currency  with  different  mean- 
ings from  mine  in  some  respects.  But  neither 
would  I  shrink  from  acknowledging  it,  for  it  has 
a  significance  which  no  other  word  serves  to  ex- 
press. Isn't  there  a  tendency  in  human  affairs 
which  is  best  described  as  socialistic  ?  It  seems  to 
me  to  be  a  reaction  from  the  individualistic  tend- 
ency, due  I  think  to  the  fact  that  the  two  tenden- 
cies are  natural  and  correlative,  and  that  each, 
under  the  influence  of  the  other,  is  by  action  and 
reaction  seeking  equilibrium.  If,  however,  what 
I  am  aiming  at  is  socialism,  then  I  must  call  it 
natural  socialism  to  distinguish  it  from  the  arbi- 
trary or  conventional  or  artificial  forms  of  social- 
ism that  are  often  proposed. 

Arbitrary  socialists  would  abolish  capitalism  by 
means  of  conventional  or  artificial  reorganizations 
of  social  service.  They  would  thereby  do  away 
with  the  contractual  mode  of  social  service,  and 


EQUAL   FREEDOM'  APPLIED.  341 

substitute  regulations  by  government,  or  bureau, 
or  guild. 

But  natural  socialism  would  retain  and  per- 
fect freedom  of  contract  by  divesting  capitalism 
of  its  perversions.  Capitalism  divested  of  its  per- 
versions would  be  natural  socialism. 

How  is  the  thing  to  be  done?  By  recourse  to 
the  social  service  law  of  equal  freedom. 

And  that  ?  By  securing  equality  of  contractual 
conditions  for  all. 

And  that?  By  practically — no,  not  virtually, 
but  in  actual  practice — distinguishing  in  the  so- 
cial service  market  the  two  essentially  different 
kinds  of  capitalism.  Yes,  I  refer  to  natural  and 
artificial  capital — they  must  be  distinguished  ac- 
cording to  their  essential  differences.  What  I 
mean  is  that  equality  of  contractual  conditions  is 
to  be  secured  by  some  practical  distinction,  with 
reference  to  capitalistic  rights  of  property.  We 
must  distinguish  between  capitalized  artificial  in- 
struments of  production,  and  capitalized  natural 
instruments  of  production,  between  artificial  capi- 
tal and  natural  capital. 

How  would  that  secure  equality  of  contractual 
opportunity?  In  the  same  way  in  principle  that 
the  analogous  distinction  would  have  done  so  un- 
der feudalism.  If  the  land — the  planet,  you 
know — had  been  treated  in  feudal  times  as  the 
sacred  inheritance  of  all,  and  its  products  as  the 
sacred  property  of  the  producers  and  their  con- 
tractual representatives,  there  would  have  been 
basic  equality  of  contractual  opportunity.  Social 
servitors  would  have  interchanged  their  individual 
services  in  such  freedom  as  to  have  produced  ap- 
proximately the  ideal  of  service  for  service. 
Feudal  landlordism  would  then  have  been  a  social 
blessing  instead  of  the  social  curse  it  was. 

In  those  circumstances  the  people  themselves 
would  have  been  the  real  landlords,  and  the  nomi- 


342  SOCIAL,    SERVICE. 

nal  landlords  simply  social  trustees;  and  wouldn't 
freedom  of  contract  have  had  opportunity  then 
for  full  swing?  Of  course  there  might  still  have 
been  arbitrary  interferences  with  interchanges  of 
service,  and  these  would  have  been  deadly  if  large- 
ly tolerated.  But  with  the  basic  freedom  estab- 
lished, which  is  freedom  of  access  to  the  natural 
sources  and  sites  for  service,  the  advantage  of 
position  would  have  been  with  the  people.  Who 
would  have  been  a  cringing  serf,  yielding  to  arbi- 
trary interference,  where  none  were  landless? 
What  producer  could  have  been  coerced  contract- 
ually where  landed  opportunities  were  equal? 
Men  would  have  bargained  in  freedom  and  upon 
an  equality  even  in  feudal  times,  if  the  land  had 
been  for  all.  Nothing  short  of  personal  enslave- 
ment, direct  physical  coercion,  could  then  have 
made  any  man  say  "lord"  or  "master"  to  any 
other;  and  that  coercion  would  have  been  exceed- 
ingly difficult  to  impose  had  rights  to  land  been 
equal. 

Precisely  so  in  principle,  Doctor,  in  these  post- 
feudal  times,  when  modern  capitalism  has  grown 
up  out  of  feudal  landlordism.  Were  we  to  treat 
capitalized  land  as  the  sacred  inheritance  of  all, 
and  its  capitalized  products  as  the  sacred  property 
of  the  producers  and  their  contractual  representa- 
tives, equality  of  contractual  opportunity  would 
forthwith  appear,  and  capitalism  would  be  a  bless- 
ing instead  of  the  curse  it  is.  The  people  them- 
selves, all  together  and  in  common,  would  then  be 
the  ?antf-capitalists ;  while  each  for  himself  would 
be  a  machine-capitalist,  either  alone  or  ia  volun- 
tary co-operation  with  others. 

If  you  would  slightly  realize  the  importance  of 
making  land-capital  a  common  inheritance — nat- 
ural capital  as  we  have  called  it  in  contradistinc- 
tion to  machine-capital,  or  artificial  capital  as  we 
have  called  that, — if  you  would  but  faintly  realize 


EQUAL,  FREEDOM  APPLIED.  343 

the  importance  of  this  change,  my  dear  Doctor, 
just  look  up  the  statistics  of  land  capitalization  as 
opposed  to  the  capitalization  of  what  is  strictly 
capital.  Look  up  the  capitalization,  that  is,  of 
the  natural  instruments  of  capitalistic  production, 
and  compare  it  with  the  capitalization  of  the  arti- 
ficial instruments.  The  data  is  exceedingly  de- 
fective to  be  sure;  but  its  defects  are  against  me, 
not  for  me.  Full  and  accurate  data  would  show 
the  aggregate  of  land  values  to  be  much  more  in 
excess  of  machine  values  than  the  defective  statis- 
tics do.  But  defective  as  they  are,  the  statistics 
of  land  capitalization  are  monumental  as  com- 
pared with  the  other  kind  of  capitalization,  if  you 
look  a  little  below  the  superficial  figures. 

Contrast,  for  instance,  the  values  of  city,  town 
and  village  sites  with  the  values  of  the  improve- 
ments. In  Greater  New  York  it  is  something  like 
two  to  one.  Contrast  the  value  of  railroad 
rights  of  way,  especially  terminals,  with  the  value 
of  tracks  and  rolling  stock.  Contrast  the  value 
of  mineral  deposits  with  the  value  of  mining  ma- 
chinery. Contrast  the  value  of  all  the  farming 
sites  of  any  community  or  all  communities, 
whether  the  sites  are  cultivated  or  not,  with  farm 
improvements.  Why,  Doctor,  the  capitalization 
of  the  natural  instruments  of  production  is  enor- 
mously greater  than  the  capitalization  of  artificial 
instruments. 

And  then  think  of  another  thing-  The  artifi- 
cial instruments  are  wearing  out.  Each  particu- 
lar one  of  them  is  of  less  value  every  year  than  it 
was  the  year  before.  All  of  them  together,  aside 
from  repairs  and  replacement,  are  worth  less  as  a 
whole  at  any  time  than  at  almost  any  time  there- 
tofore. Not  so  with  the  natural  instruments. 
Although  the  soil  of  farm  sites  wears  out,  and  the 
deposits  of  mining  sites  give  out,  and  sites  of  all 
kinds  here  and  there  depreciate  in  value  in  con- 


344  SOCIAL    SERVICE. 

sequence  of  shifting  population,  this  is  not  go  of 
most  sites  nor  of  all  sites  together.  Sites  as  a 
capitalized  whole,  the  land,  the  planet,  this  great 
natural  instrument  of  production,  upon  which  we 
depend  for  all  other  instruments,  this  natural 
capital,  is  worth  more  and  not  less  from  genera- 
tion to  generation.  So  that  when  the  artificial  in- 
struments of  any  generation,  the  artificial  capital 
which  comes  to  that  generation  from  the  preced- 
ing generation,  when  this  has  all  gone  or  almost 
all  gone  back  to  the  land  whence  it  came,  and  is 
of  no  more  use  and  no  more  value,  natural  capital 
is  more  valuable  than  before  and  is  capitalized 
higher  than  ever.  It  is  the  same  old  earth,  the 
same  revolving  planet,  with  no  extension  of  area 
and  no  addition  of  substance;  but  its  capitaliza- 
tion has  risen,  and  in  consequence  those  who  wish 
to  exchange  service  for  service  must  yield  a  larger 
service  than  ever  to  the  owners  of  this  natural 
capital. 

Observe  further,  Doctor,  that  co-operative  labor, 
the  aggregate  labor  energy  of  the  social  service 
market,  not  only  could  but  actually  does,  day  by 
day  and  year  by  year  and  generation  by  genera- 
tion, replace  and  improve  and  add  to  the  artificial 
instruments  of  production,  but  that  it  cannot  add 
to  the  area  or  the  substance  of  the  planet.  It  can 
and  does  increase  the  supply  of  artificial  capital  by 
production;  it  does  not  and  cannot  increase  the 
supply  of  natural  capital  by  creation. 

Don't  you  think,  Doctor,  that  if  the  planet, 
from  which  all  these  artificial  instruments  of  so- 
cial service  must  come  if  they  come  at  all,  and 
upon  which  they  have  to  be  utilized  if  utilized  at 
all, — don't  you  think  that  if  the  capitalization  of 
this  planet  were  treated  as  a  mass  of  common 
values,  as  natural  capital  which  is  fairly  the  in- 
heritance and  property  of  all,  that  an  era  of  free 
bargaining  would  result,  in  consequence  of  which 


EQUAL  FREEDOM  APPLIED.  345 

the  capitalization  of  products,  including  artificial 
capital,  would  be  distributed  in  pretty  fair  pro- 
portion to  useful  service? 

Don't  you  think  that  under  these  circumstances 
those  who  served  best  would  get  most?  that  those 
who  served  least  would  get  least?  that  those  who 
didn't  serve  at  all  would  get  nothing?  and  yet 
that  even  those  who  got  most  would  nevertheless 
have  no  coercive  powers  over  even  those  who  got 
nothing  ? 

What  would  become  of  those  who  didn't 
serve?  Why,  that  would  depend.  They  might 
get  charity  for  humanity's  sake,  though  they  re- 
fused to  pay  their  way  with  service.  They  might 
get  gifts  for  friendship's  sake;  or  support  from 
over-fond  mothers  or  wives ;  or  loving  family  care, 
or  just  and  liberal  communal  care,  if  they  were 
really  helpless  to  serve.  But  they  would  get  noth- 
ing as  matter  of  contractual  right.  The  worthy 
would  not  suffer.  As  for  the  unworthy — well,  we 
could  then  say  to  them  what  it  is  now  a  mockery  to 
say  to  idle  men :  "Go  to  work !"  For  in  those  cir- 
cumstances, Doctor,  there  would  always  and  every- 
where be  more  profitable  work  to  do  than  men  to 
do  it. 

Don't  you  see  it  all,  Doctor?  Well,  if  you  do 
see  it  in  theory,  let  us  pass  on  to  the  practical.  If 
you  grasp  the  principle,  let's  get  down  to  the  con- 
crete. 

By  what  practical  method  may  we  distinguish 
natural  capital  from  artificial  capital,  so  as  to  se- 
cure under  capitalism,  in  common  to  all  as  social 
units,  the  benefits  of  natural  capital,  and  to  each 
individual  in  proportion  to  his  service  the  benefits 
of  artificial  capital  ?  In  other  words,  Doctor,  how 
shall  we  in  practice  divest  capitalism  of  its  per- 
versions, how  establish  natural  socialism  without 


346  SOCIAL    SERVICE. 

artificial  socialism,  how  apply  in  practice  to  capi- 
talism the  social  service  law  of  equal  freedom  ? 

Yes,  it's  too  late  to  go  into  that  here ;  but  come 
along  with  me  to  my  house  and  we'll  finish  our 
talk  as  we  go. 


CHAPTER  XXI. 
Method. 

Any  method  of  divesting  capitalism  of  its  per- 
versions and  applying  to  it  in  practice  the  social 
service  law  of  equal  freedom,  must  conform  at 
the  outset  to  prevailing  customs.  If  it  doesn't 
do  this  it  won't  be  practical;  for  human  na- 
ture is  not  revolutionary,  but  progressive.  As 
it  is  true  of  the  individual  that  he  is  largely  a 
creature  of  habit,  so  it  is  true  of  society  that  it  is 
largely  a  creature  of  custom.  I  have  here  an 
excellent  book  on  that  subject.  It  is  Carter's 
"Law:  Its  Origin,  Growth  and  Function,"  and 
I  will  let  you  take  it  with  you  if  you  wish — James 
C.  Carter,  you  know;  probably  the  ablest  lawyer 
at  the  New  York  bar  at  the  close  of  the  last  century. 
But  may  we  not  agree  for  the  present,  without 
turning  to  any  books  upon  the  subject,  that  in 
choosing  a  practical  method  for  so  radical  a  pur- 
pose, we  must  select  one  that  is  adaptable  in  its 
beginnings  to  deep  rooted  custom?  Well  enough 
it  may  be,  Doctor,  to  hitch  your  wagon  to  a  star; 
indeed,  it  is  the  thing  to  do  if  your  wagon  be  an 
observation  vehicle.  But  your  plow  you  must 
hitch  to  something  nearer  the  center  of  the  earth. 
And  practical  reforms  are  more  like  subsoil 
plows  than  sky-sailing  wagons.  You  must  hitch 
practical  reforms  to  prevailing  customs. 

Now  what  are  the  customs  to  which  any  method 
for  effecting  our  ultimate  purpose  must  at  the 
outset  conform?  Listen.  We  are  dealing  with 
landlordism  in  its  modern  guise  of  land  capital- 
ism. That  is  the  prevailing  custom  of  which  w« 


348  SOCIAL    SERVICE. 

have  to  take  account.  And  we  want  to  alter  its 
effect  from  a  fostering  of  special  privileges  to 
the  establishing  of  equal  opportunities.  Isn't  that 
our  problem? 

Obviously,  then,  the  thing  to  do  is  to  make 
land  capitalizations  common  property.  This  is  the 
star  to  which  we  must  hitch  our  wagon. 

But  in  attempting  at  once  to  make  land  capital- 
izations common,  we  should  come  in  conflict 
with  the  deep-rooted  custom  of  private  land  ten- 
ure, which  must  be  respected  if  we  would  succeed. 
Whether  common  occupancy  be  the  best  tenure 
of  land  or  not — and  let  me  assure  you  that  I 
am  very  far  from  thinking  it  so — but  whether 
it  be  so  or  not,  the  practical  method  of  estab- 
lishing common  interests  in  land  in  place  of 
special  privileges,  must  conform  to  the  prevailing 
custom  of  private  tenure.  This  is  the  team  to 
which  we  must  hitch  our  plow. 

Not  only  must  our  method  conform  to  the  uni- 
versal custom  of  private  tenure,  but  it  must  vary 
in  form  with  place  and  time  as  customs  of  private 
tenure  vary.  In  some  parts  of  the  world,  for 
instance,  tenancies  under  great  landlords  consti- 
tute a  custom  so  common  and  deep-rooted  that  a 
change  to  tenancy  under  the  state  would  cause 
no  social  shock  and  might  be  along  the  line  of 
least  resistance  and  greatest  momentum.  But  on 
the  other  hand  there  are  parts  of  the  world  where 
every  one  at  least  hopes  to  be  his  own  little  land- 
lord; and  where  this  ideal  is  customary,  tenancy 
under  the  state  would  be  repugnant  to  all  who  had 
not  yet  given  up  hope.  In  such  places  common  own- 
ership would  be  along  a  line  of  high  resistance 
and  low  momentum ;  and  there  a  method  must  be 
used  which,  while  it  involves  the  principle,  will 
not  run  counter  to  the  custom. 

Our  own  country,  Doctor,  is  in  the  latter  cate- 
gory. Private  ownership  of  land  is  our  national 


METHOD.  349 

ideal.  We  flatter  ourselves  that  every  one  can 
have  his  home  and  ground  to  cultivate  if  he  wants 
it.  We  know  in  our  souls  that  this  isn't  so,  but 
it  is  one  of  our  forms  of  patriotic  self-flattery. 
Even  if  it  were  so,  opportunity  to  cultivate  a 
garden  plot  or  a  little  farm  is  not  enough.  The 
cultivation  of  the  earth  consists  not  alone  in  grow- 
ing garden  truck  and  farm  produce.  Without 
straining  metaphor  in  the  least,  cultivation  of  the 
earth  may  be  said  to  consist  also  in  digging  ore, 
in  manufacturing,  transporting  and  trading  all 
kinds  of  goods,  in  building  houses  and  factories 
and  machines  and  ships,  and  in  otherwise  render- 
ing service  for  service  throughout  a  vast  industrial 
network.  Since  our  planet  is  capitalized,  the  thing 
needful  is  not  to  get  a  little  agricultural  land  on 
a  social  frontier.  The  thing  needful  is  to  secure 
participation  for  all  in  the  social  advantages  of 
capitalism  at  its  best;  and  this  is  to  be  accom- 
plished by  securing  equality  of  interest  in  land 
capitalizations. 

As  I  have  already  indicated,  our  object  could  be 
accomplished  by  nationalizing  the  land,  thereby 
making  everybody  a  tenant  of  the  state.  But 
this  would  conflict  in  our  country  with  deep 
seated  customs  and  habits  of  thought.  What  we 
need  here  is  a  method  of  securing  the  result  with- 
out tearing  up  our  customs  by  the  roots.  If  we 
get  such  a  method,  the  evils  of  the  custom  will 
yield  to  the  influences  of  purification. 

What  do  I  suggest?  I  suggest  what  Henry 
George  proposed  when  he  advised  the  abolition  of 
"all  taxation  save  that  upon  land  values."  You 
have  "Progress  and  Poverty"  in  your  library; 
read  the  four  chapters  of  book  viii  over  again, 
and  weigh  the  arguments  for  and  against  this 
proposition,  for  they  are  all  there.  It  is  enough 
for  me  to  say  now  that  the  essence  of  the  proposi- 
tion is  the  taking  annually  for  common  use,  by 


350  SOCIAL    SERVICE. 

our  customary  machinery  of  taxation,  of  a  per- 
centage of  the  customary  value  of  capitalized 
land,  and  the  exempting  of  everything  else. 

Eun  counter  to  the  custom  of  taxing  everything 
in  sight?  Yes,  it  surely  would.  But  that  cus- 
torn  is  not  deep-seated.  A  custom  which  every- 
body tries  to  elude,  offers  no  serious  obstacle  to 
reforms  running  counter  to  it.  Consequently  I 
should  expect  little  difficulty  in  getting  cordial 
public  approval  of  so  much  of  George's  proposi- 
tion as  involves  the  exemption  of  artificial  capital. 
As  to  the  part  that  involves  the  taxing  of  capi- 
talizations of  land,  why  that  encounters  no  hos- 
tile custom  either,  for  we  already  tax  capi- 
talizations of  land.  George's  method  would 
in  practice  raise  only  a  question  of  more  or  less; 
and  questions  of  more  or  less  are  not  vital  with 
reference  to  habits  and  customs. 

You  won't  mind  coming  into  the  house  with 
me,  will  you,  Doctor,  and  spinning  out  a  little 
longer  what  is  to  be  our  last  talk  on  the  science 
of  social  service?  I  want  to  try  to  show  you 
how  this  simple  change  in  a  detail  of  taxation 
would  in  practice  adapt  capitalism  to  the  law  of 
equal  freedom. 

For  illustration,  now,  out  of  the  window  there 
you  see  Simon  D.  Sampson's  vacant  building  lots. 
What  do  you  think  would  happen  to  them,  if 
artificial  capital  were  exempt  from  taxation,  and 
natural  capital  made  up  the  difference  by  a  high 
ad  valorem  tax? 

Couldn't  keep  on  holding  those  lots  out  of  use  ? 
Of  course  he  couldn't.  They  are  natural  capital, 
and  their  capitalization  runs  up  to  a  pretty  figure. 
To  hold  them  vacant  and  idle  any  longer  wouldn't 
pay,  if  they  were  taxed  a  good  percentage  of  their 
capitalized  value.  Sampson  would  have  to  utilize 
them  himself,  or  else  let  somebody  else  utilize 
them.  Either  way  their  capitalization  would  fall, 


METHOD.  361 

and  untaxed  buildings  would  rise  upon  them,  con- 
structed of  untaxed  materials. 

No,  Sampson's  case  wouldn't  be  isolated.  The 
effect  would  be  as  universal  as  the  reform.  Sites 
for  buildings,  natural  deposits  for  mining,  sites 
for  farms,  natural  sites  and  sources  for  all  kinds 
of  production  and  trade,  would  be  available  in 
abundance  and  far  in  excess  of  the  demand.  Con- 
sequently they  would  have  no  capitalization.  Only 
the  sites  of  exceptionally  high  utility,  of  which 
there  were  not  enough  to  supply  the  demand, 
would  have  any  capitalization.  There  would  be 
no  "rake-off"  profit — don't  you  see? — in  hold- 
ing out  of  use  any  sites  below  that  high 
grade  of  utility.  Consequently  sites  be- 
low that  grade  would  command  neither 
price  nor  rent  nor  be  subject  to  any  tax. 
But  as  taxes  from  the  superior  and  scarce  sites 
would  be  ample,  all  improvements  and  all  pro- 
duced goods  of  every  other  kind  would  be  exempt, 
and  consequently  much  cheaper  to  produce — not 
cheaper  in  labor  cost,  but  in  taxes  and  profits  on 
taxes — and  therefore  much  easier  to  buy.  Sampson, 
for  instance,  would  no  longer  hold  out  of  use  his 
suburban  lots,  nor  that  pasture  land  just  beyond 
the  city  limits,  any  more  than  he  would  hold  out 
of  use  those  vacant  building  lots  over  yonder. 

No  doubt  the  lots  over  yonder  would  retain  a 
capitalized  value,  for  they  are  exceptionally  well 
located.  There  are  not  enough  such  locations  to 
supply  the  demand.  For  that  reason  those  lots 
would  furnish  public  revenue — but  for  the  site 
and  not  for  the  improvements  that  would  come. 
Quite  different,  however,  would  it  be  with  the 
suburban  lots  and  the  pasture.  That  "pasture" 
of  Sampson's  is  a  fraud.  People  want  homes 
there,  and  Sampson  puts  the  place  to  pasture  be- 
cause this  enables  him  to  keep  the  site  out  of  its 
best  use  without  paying  an  urban  tax.  It  is  a 


352  SOCIAL    SERVICE. 

cheap  way  of  waiting  for  higher  prices  for  build- 
ing lots. 

Now,  if  Sampson  had  to  pay  taxes  heavily  on 
the  capitalization  of  that  "pasture"  and  those  lots, 
and  heavier  still  as  their  capitalization  rose,  what 
would  happen?  Wouldn't  he  utilize  them  him- 
self by  building  houses  there  ?  or  else  sell  to  some- 
body who  would?  or  else,  if  he  couldn't  find  a 
customer,  wouldn't  he  renounce  proprietorship 
and  let  the  land  fall  into  the  category  of  com- 
mon lands  having  no  market  and  therefore  no 
capitalization,  and  open  to  the  first  takers?  and 
in  that  case,  wouldn't  they  hold  the  lots  and  use 
them  without  tax  until  the  lots  began  to  get 
scarce  enough  to  become  tradeable  at  a  valuation 
and  therefore  to  exhibit  a  capitalization  again? 
A  close  approximation  to  this  would  certainly  be 
probable  with  sites  like  those  suburban  ones  of 
Sampson's.  The  market  would  force  it.  For 
when  everybody  was  taxed  heavily  on  his  land 
capitalization,  all  sites  not  in  use  would  seek  a 
sale,  thereby  creating  a  falling  land  market,  which 
would  lessen  the  capitalization  and  so  increase  the 
financial  accessibility  of  land  generally. 

And  coincident  with  that  process — don't  forget 
this,  Doctor — coincident  with  the  process,  all  uses 
of  land  would  be  exempt  from  taxation.  While 
the  farmer,  if  an  owning  farmer,  paid  a  heavy 
percentage  in  taxes  on  the  capitalization  of  his 
site,  if  it  was  scarce  enough  to  have  a  capitaliza- 
tion, he  would  pay  nothing  on  his  improvements, 
his  stock  or  his  product.  If  a  tenant-farmer,  he 
would  pay  nothing  except  his  rent,  no  tax  at  all, 
and  new  farm  sites  would  be  cheap  to  get,  so  that 
he  might  easily  become  a  farm  owner.  While  the 
mining  interest  paid  heavily  on  the  capitalization 
of  natural  mineral  deposits  scarce  enough  to  have 
a  capitalization,  they  would  pay  nothing  on  min- 
erals extracted.  While  real  estate  interests  paid 


METHOD.  353 

a  heavy  annual  percentage  on  the  capitalization  of 
building  sites  scarce  enough  to  have  a  capitaliza- 
tion, they  would  pay  nothing  on  buildings.  While 
railroads  and  other  transporting  agencies  would 
pay  a  heavy  percentage  on  the  capitalization  of 
terminal  sites  and  of  rights  of  way  from  terminal 
to  terminal,  they  would  pay  nothing  on  rolling 
stock  and  plant. 

Don't  you  realize,  then,  that  artificial  capital 
under  this  stimulus  of  exemption  from  taxation 
and  accessibility  to  natural  capital,  would  in- 
crease? Don't  you  see,  in  other  words,  that  the 
demand  for  mutual  service  would  be  augmented 
by  exemption  from"  taxes  and  enhanced  accessi- 
bility to  land?  And  don't  you  see  that  augment- 
ed demand  for  service  implies  augmented  com- 
pensation for  service? 

Don't  you  see,  further,  doctor,  that  those  ulti- 
mate results  would  show  themselves  in  degree  as 
the  reform  was  begun — smaller  results  with  mild 
beginnings  and  greater  ones  with  advanced  appli- 
cation, and  the  same  results  in  kind  from  least 
to  greatest?  And  don't  you  see,  also,  that  inci- 
dentally still  other  results,  tending  to  socialize 
the  social  and  individualize  the  individual,  would 
appear  ? 

Think  it  over.  As  the  process  went  on  even 
from  the  mildest  beginnings,  the  co-operative 
functions  of  government  would  by  natural  evolu- 
tion come  more  and  more  into  play.  Public  utili- 
ties of  the  natural  monopoly  order  would  be  op- 
erated by  the  appropriate  governments— national, 
State,  municipal.  And  there  would  be  a  tend- 
ency toward  operating  them  free,  as  -the  fact 
dawned  upon  the  public  mind  that  the  expense 
could  be  met  out  of  taxes  calculated  on  the  in- 
crease they  gave  to  the  capitalizations  of  land 
in  the  regions  in  which  they  were  operated. 

In  some  such  way  as  by  the  process  I  have  in- 


354  SOCIAL    SERVICE. 

dicated,  natural  capital  would  come  to  be  more 
and  more  a  source  of  common  revenue.  We  should 
thereby  secure  for  all,  the  financial  benefits  of 
social  progress  which  now  go  so  largely  to  capital- 
istic interests.  Land  capitalization  would  decline, 
but  not  the  common  revenue.  This  would  rise 
with  social  progress. 

The  reason  that  land  capitalization  would  de- 
cline would  be,  not  because  land  revenue  did — 
for  it  wouldn't — but  because  land  revenue  would 
be  so  largely,  even  if  not  exclusively,  public  rev- 
enue instead  of  private  revenue,  that  there  would  be 
but  little  of  it  left  to  capitalize.  And  so,  land- 
capitalization  (hardly  more  than  nominal  in  the 
end,  although  the  annual  revenue  from  land  had 
greatly  grown),  would  be  completely  distinguished 
from  capttoZ-capitalization — the  natural  from  the 
artificial  instruments  of  production.  And  this 
distinction  would  begin  in  degree  as  the  reform 
began,  would  grow  as  the  reform  grew,  and  would 
yield  its  beneficent  social  and  individual  results 
throughout  in  proportion  to  the  intensity  of  ap- 
plication of  the  reform. 

Don't  you  see,  Doctor,  that  the  interchange  of 
service  for  service  would  be  freer  and  freer  as 
that  process  went  on — the  process  of  transform- 
ing natural  capital  into  community  capital,  and 
of  confirming  individual  ownership  of  artificial 
capital  in  its  producers,  according  to  their  earn- 
ings? 

Think  a  moment,  then,  and  you  will  realize 
that  it  would  all  be  effected  by  means  of  individ- 
ual bargaining.  Contractual  freedom,  stimulat- 
ed by  the  earlier  applications  of  George's  method, 
would  progress  with  the  advance  of  the  evolu- 
tionary process;  and  out  of  it  would  come,  with- 
out friction  and  speedily  though  gradually,  a  con- 
dition in  which  exchangers  of  service  for  serv- 


METHOD.  355 

ice  would  be  upon  an  equal  bargaining  basis  and 
free  from  "rake-off"  profits. 

Each  who  needed  any  form  of  artificial  capital 
would  bargain  for  it  freely  with  those  who  needed 
other  forms.  They  would  bargain  for  it  on  the 
basis  of  service  for  service,  and  with  no  undue 
advantage  to  either  in  the  negotiations.  The  ben- 
efits of  the  exchange  would  go  to  the  bargainers 
themselves,  all  of  it,  without  so  much  as  the  bur- 
den of  a  tax,  and  with  no  profit  to  privileged  in- 
terests, for  there  would  be  no  such  interests, 
v  Each  who  needed  natural  capital  would  bargain 
for  that  also,  freely  among  themselves,  on  the 
basis  of  differential  advantages  of  location;  and 
the  outcome  of  their  own  bargainings  for  loca- 
tion would  determine  the  interest  or  revenue  of 
the  community ;  for  upon  that  pro  rata  basis  each 
occupant  of  land  would  pay  taxes — taxes  to  the 
public,  mind  you,  and  not  "rake-off"  profits  to 
speculators — no  taxes  at  all  for  sites  of  no  ex- 
changeable value,  a  little  tax  for  sites  of  a  little 
exchangeable  value,  and  higher  taxes  for  sites  of 
higher  exchangeable  value. 

The  people  would  be  on  the  high  road  toward 
contractual  freedom  from  the  start,  however 
slight  the  momentum  at  first.  And  with  their 
advance  along  that  highway,  freedom  of  contract 
would  be  progressively  greater  as  they  approached 
the  ideal  of  the  perfect  law  of  equal  freedom. 

Dogmatic  as  I  may  have  seemed  these  last  few 
minutes,  Doctor,  I  have  not  intended  to  be.  I 
have  only  indicated  results  which  are  fairly  dem- 
onstrable in  theory.  In  many  places  where  the 
process  is  in  operation,  in  a  small  way,  these  re- 
•ults  are  demonstrating  themselves  in  actual  ex- 
perience. I  refer  you  to  New  Zealand,  some  of 
the  States  of  Australia  and  some  parts  of  Canada. 

This  "the  single  tax"?  Certainly.  And  what 
difference  does  that  make?  Is  the  proposition  it- 


356  SOCIAL    SERVICE. 

self  either  better  or  worse  for  the  name?  All 
through  our  talks  I  have  been  trying  to  give  you 
"the  single  tax"  as  an  economic  philosophy  ("nat- 
ural taxation/'  as  Thomas  G.  Shearman  called  it 
in  his  book  of  that  name,  and  this  is  doubtless  the 
better  term) ;  and  now  I  have  given  it  to  you  as 
a  practical  method  of  social  readjustment — a 
method,  as  I  have  told  you,  of  subjecting  capital- 
ism to  the  law  of  equal  freedom. 

And  pray  take  notice  that  when  I  say  "method" 
I  don't  mean  reconstructive  contrivance.  Social 
reform  must  be  accomplished  not  by  artificial  or 
conventional  reconstruction.  The  methods  of  re- 
form must  be  processes  of  promoting  natural  de- 
velopment. Social  reform  is  more  like  the  work 
of  the  gardener  than  of  the  carpenter  or  black- 
smith. For  human  society  is  no  mechanical  struc- 
ture to  be  torn  apart  and  rebuilt;  it  is  a  natural 
organism  to  be  weeded  and  cultivated.  What  "the 
single  tax"  method  aims  at,  therefore — what  this 
natural  system  of  taxation  would  produce — is  not 
the  wrecking  of  capitalistic  society  and  the  build- 
ing of  something  else  upon  its  ruins.  Its  func- 
tion is  to  promote  right  growth  instead  of  wrong 
growth.  Its  method  is  free  play  for  the  natural 
laws  of  social  development,  through  adaptation 
to  society  as  we  find  it  of  the  greatest  and  best  of 
all  the  natural  laws  of  social  progress — the  social 
service  law  of  equal  freedom. 

The  purpose  of  this  natural  taxation 
which  is  commonly  known  as  "the  single 
tax,"  would  be  effected  in  two  correl- 
ative ways.  One,  socialization  of  the  value 
of  natural  capital;  and,  two,  individualiza- 
tion  of  the  value  of  artificial  capital;  by  taxing 
the  capitalization  of  the  former  fully  and  exempt- 
ing the  latter  altogether.  Exempting  altogether 
the  artificial  capital,  including  all  the  competitive 
processes  of  production  and  trade,  we  should  re- 


METHOD.  357 

lieve  social  service  of  public  burdens,  obstructions, 
exactions,  inequalities,  and  disturbances.  Taxing 
fully  the  differential  capitalized  values  of  natural 
capital,  we  should  at  once  supply  the  public  in- 
come necessary  for  social  needs,  and  relieve  social 
service  of  private  obstructions,  exactions,  inequal- 
ities and  interferences.  By  action  and  reaction, 
those  two  correlative  ways  of  natural  taxation — 
full  taxation  of  natural  capital  and  complete  ex- 
emption of  artificial  capital — would  produce  an 
approximately  stable  equilibrium  of  social  serv- 
ice, with  service  for  service  as  the  basis  of  ex- 
change. 

In  as  few  words  as  possible,  Doctor,  now  that 
we  are  parting,  let  me  summarize  the  effect  of 
this  natural  taxation  which  has  acquired  the  name 
of  "the  single  tax."  It  would  socialize  what  is 
social.  It  would  individualize  what  is  individual. 
It  would  correlate  those  two  principles  of  human 
society  into  co-operative  unity,  while  conserving 
their  essential  differences.  It  would  thereby  nat- 
urally evolve  a  social  service  world  in  which  each 
would  fairly  serve  and  each  be  fairly  served,  all 
in  the  freedom  of  individual  initiative  and  di- 
rection, yet  with  the  power  of  social  co-operation 
and  solidarity. 

Our  friend  Oliver  K.  Trowbridge  puts  the  mat- 
ter very  clearly  and  forcibly  as  well  as  briefly  in 
his  little  pamphlet  on  "Social  Solidarity."  Here 
is  a  copy.  Put  it  into  your  vest  pocket  to  read 
at  your  leisure.  And  don't  fail  to  reflect  upon  a 
clause  on  page  17,  which — let  me  turn  to  it — 
which  is  in  these  words-: 

Freedom  for  the  individual  and  equality  of  oppor- 
tunity for  all.  This  is  the  law  which  harmonizes  the 
problem  of  individual  life,  with  the  problems  of  so- 
cial life;  this  is  the  law  in  which  lies  the  solution  of 
all  political,  civil,  social  and  economic  questions. 

And  if  you  take  your  "Progress  and  Poverty" 
with  you  on  your  journey,  Doctor,  as  I  understand 


358  SOCIAL    SERVICE. 

you  intend  to,  read  again  with  thoughtful  care 
the  chapter  on  "The  Law  of  Human  Progress," 
the  chapter,  you  know,  in  which  Henry  George 
wrote  something  like  this:  "Civilization  is  co- 
operation, and  union  and  liberty  are  its  factors." 

The  more  you  reflect  upon  the  subject,  the  more 
certain  you  will  be  that  Henry  George  was  right 
when  he  wrote  that  aphorism.  You  will  be  sure 
of  it  if  you  read  the  whole  chapter  of  "Progress 
and  Poverty"  in  which  that  characterization  ef 
civilization  occurs.  And  if  you  will  permit  m« 
to  read  an  extract  from  George's  "Land  Ques- 
tion" before  we  part,  you  will  realize  the  impor- 
tance of  concentrating  your  attention  upon  this 
point.  I  shall  not  read  at  great  length.  Here 
we  have  it,  beginning  at  the  fourth  paragraph 
of  chapter  xiv.,  entitled  "The  Civilization  That  Is 
Possible": 

I  doubt  not  that  whichever  way  a  man  may  turn  to 
inquire  of  Nature,  he  will  come  upon  adjustments 
which  will  arouse  not  merely  his  wonder,  but  his 
gratitude.  Yet  what  has  most  impressed  me  with 
the  feeling  that  the  laws  of  Nature  are  the  laws  of 
beneficent  intelligence  is  what  I  see  of  the  social 
possibilities  involved  in  the  law  of  rent.  Rent — 

One  moment.  It  isn't  necessary,  is  it,  Doctor, 
for  me  to  more  than  suggest  that  George  doesn't 
mean  house  rent  ?  His  allusion  is  not  to  the  value 
of  artificial  commodities,  such  as  houses,  or  ma- 
chinery, or  anything  of  that  kind.  It  is  to  the 
value  of  the  natural  commodity — land,  the  earth, 
the  sites  and  sources  of  things  artificial,  the  plan- 
et. He  says  as  much  in  a  footnote  here: 

I,  of  course,  use  the  word  "rent"  in  its  economic, 
not  in  its  common  sense,  meaning  by  it  what  is  com- 
monly called  ground-rent. 

To  proceed  with  the  reading  from  George's 
text.  Referring  to  his  belief  in  the  beneficence  of 
the  natural  law  of  rent,  he  continues: 

Rent  springs  from  natural   causes.     It  arises   as 


METHOD.  359 

society  develops,  from  the  differences  in  natural  op- 
portunities and  the  differences  in  the  distribution  of 
population.  It  increases  with  the  division  of  labor, 
with  the  advance  of  the  arts,  with  the  progress  of 
invention.  And  thus,  by  virtue  of  a  law  impressed 
upon  the  very  nature  of  things,  has  the  Creator  pro- 
vided that  the  natural  advance  of  mankind  shall  be 
an  advance  toward  equality,  an  advance  toward  co- 
operation, an  advance  toward  a  social  state  in  which 
not  even  the  weakest  need  be  crowded  to  the  wall, 
in  which  even  for  the  unfortunate  and  the  cripple 
there  may  be  ample  provision.  For  this  revenue, 
which  arises  from  the  common  property,  which  rep- 
resents not  the  creation  of  value  by  the  individual, 
but  the  creation  by  the  community  as  a  whole, 
which  increases  just  as  society  develops,  affords  a 
common  fund,  which,  properly  used,  tends  constantly 
to  equalize  conditions,  to  open  the  largest  oppor- 
tunities for  all,  and  utterly  to  banish  want  or  the 
fear  of  want. 

How  can  any  thoughtful  man  fail  to  see  that? 
But  let  me  read  on  a  little  into  the  ethics  of  the 
matter : 

The  squalid  poverty  that  festers  in  the  heart  of 
our  civilization,  the  vice  and  crime  and  degradation 
and  ravening  greed  that  flow  from  it,  are  the  results 
of  a  treatment  of  land  that  ignores  the  simple  law  of 
justice,  a  law  so  clear  and  plain  that  it  is  universally 
recognized  by  the  veriest  savages.  What  is  by  na- 
ture the  common  birthright  of  all,  we  have  made 
the  exclusive  property  of  individuals;  what  is  by 
natural  law  the  common  fund,  from  which  common 
wants  should  be  met,  we  give  to  a  few  that  they 
may  lord  it  over  their  fellows.  And  so  some  are 
gorged  while  some  go  hungry,  and  more  is  wasted 
than  would  suffice  to  keep  all  in  luxury. 

Destructive  criticism  ?  Certainly.  How  can  you 
have  the  constructive  before  the  destructive,  in 
remedying  social  conditions.  You  can't  construct 
gardens  where  weeds  are,  until  you  destroy  the 
weeds.  But  George  is  constructive  of  good  as  well 
as  destructive  of  evil.  Hear  him,  as  I  read  fur- 
ther from  the  same  chapter: 

Appropriate  rent  in  the  way  I  propose,  and  specu- 


360  SOCIAL    SERVICE. 

lative  rent  would  be  at  once  destroyed.  The  dogs  In 
the  manger  who  are  now  holding  so  much  land  they 
have  no  use  for,  in  order  to  extract  a  high  price 
from  those  who  do  want  to  use  it,  would  be  at  once 
choked  off,  and  land  from  which  labor  and  capital — 

This  means  artificial  capital,  of  course.  "Land 
from  which  labor  and"  artificial  capital — 
are  now  debarred  under  penalty  of  a  heavy  fine 
would  be  thrown  open  to  improvement  and  use.  The 
incentive  to  land  monopoly  would  be  gone.  Popula- 
tion would  spread  where  it  is  now  too  dense,  and  be- 
come denser  where  it  is  now  too  sparse. 

Appropriate  rent  in  this  way,  and  not  only  would 
natural  opportunities  be  thus  opened  to  labor  and 
capital — 

Artificial  capital  again,  Doctor.  "Not  only 
would  natural  opportunities  be  thus  opened  to 
labor  and"  artificial  capital — 
but  all  the  taxes  which  now  weigh  upon  production 
and  rest  upon  the  consumer  could  be  abolished. 
The  demand  for  labor  would  increase,  wages  would 
rise,  every  wheel  of  production  would  be  set  in  mo- 
tion. 

Appropriate  rent  in  this  way,  and  the  present  ex- 
penses of  government  would  be  at  once  very  much 
reduced — reduce  directly  by  the  saving  in  the  pres- 
ent cumbrous  and  expensive  schemes  of  taxation, 
reduced  indirectly  by  the  diminution  in  pauperism 
and  in  crime.  This  simplification  in  governmental 
machinery,  this  elevation  of  moral  tone  which  would 
result,  would  make  it  possible  for  government  to  as- 
sume the  running  of  railroads,  telegraphs,  and  other 
businesses  which,  being  in  their  nature  monopolies, 
cannot,  as  experience  is  showing,  be  safely  left  in 
the  hands  of  private  individuals  and  corporations. 
In  short,  losing  its  character  as  a  repressive 
agency,  government  could  thus  gradually  pass  into 
an  administrative  agency  of  the  great  co-operative 
as  sociation — society. 

Note  that,  Doctor,  and  reflect  upon  it.  If  rent 
— ground  rent,  mind  you ;  the  differential  values  of 
mere  location — if  this  fund  were  appropriated  to 
common  instead  of  private  uses,  "government 
would  loae  its  character  as  a  repressive  agency" 


METHOD.  361 

because  the  need  for  repression  would  die  out; 
and  could  "gradually  pass  into  an  administrative 
agency  of  the  great  co-operative  association — so- 
ciety" 

When  you  see  this  clearly  you  will  also  see  that 
natural  taxation,  "the  single  tax"  as  this  method 
of  social  adjustment  proposed  by  Henry  George 
is  called,  is  the  simple  and  normal  way  in  our 
civilization  for  realizing  the  natural  and  benefi- 
cent social  climax  which  those  words  of  George 
suggest. 

Good  night,  Doctor.  Good  night,  and  good- 
bye. 


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